wednesday update

SHORT TERM: market pulls back after recent gains, DOW -180

Overnight the Asian all up streak ended at one day, they were mixed. Europe opened lower and closed -1.15%. US index futures were higher overnight and at 8:30 Durable goods orders came in negative: -0.1% vs +4.1%. The market opened higher at SPX 1177, then rallied to 1185 by 10:00. The SPX had closed at 1175 yesterday. After hitting what turned out to be the high for the day the market started to pullback. Around 11:00 the SPX hit 1169 and tried to rally. The rally hit SPX 1180 by 12:00, and then another pullback followed. By 2:00 the SPX hit 1159, bounced to 1167 by 3:00, and then headed lower again. Nearing the close the SPX hit 1150 and closed at 1151.

For the day the SPX/DOW were -1.95%, and the NDX/NAZ were -1.80%. Bonds gained 7 ticks, Crude lost $3.70, Gold dropped $45.00, and the USD was higher. Support for the SPX drops to 1146 and then 1136, with resistance at 1168 and then 1176. Short term momentum hit oversold near the lows. Tonight, a speech from FED chariman Bernanke at 5 PM. Tomorrow Q2 GDP and weekly Jobless claims at 8:30, then Pending home sales at 10:00.

The market opened slightly higher today, rallied, and then took out yesterday’s SPX 1170 low. After yesterday’s SPX 1196 high, the market has been working its way lower, Bernanke speaks after the close, with only one overlap thus far. The pullback late yesterday afternoon was started by the financials, and they remained weak today. The short term OEW charts turned to a negative bias today, and would require a rally back above the OEW 1168 pivot to turn positive again.

If we count last week’s double top at SPX 1220 as a failed C wave of an inverted flat (SPX 1231-1136-1220). Then the decline to SPX 1114 could be counted as a Minor wave 1. The rally to yesterdays’ SPX 1196 high could have ended Minor wave 2. We posted two tentative green labels to that effect on the SPX hourly chart this afternoon. With FED chairman Bernanke speaking after the close we could be witnessing another sell the FED comments reaction. Short term support is at the 1136/1146 pivots with resistance at the 1168/1176 pivots. Best to your trading!

MEDIUM TERM: downtrend low at SPX 1102

LONG TERM: bear market highly probable

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

About tony caldaro

Investor
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98 Responses to wednesday update

  1. Just Lee again says:

    Sure is H D

    Good day. !

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  2. Just Lee again says:

    Have a great day guys..
    I’m an addict I have issues 🙂

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  3. Just Lee again says:

    ESZ just hit yes low …
    Its sassy 😛

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  4. vishal409 says:

    Tony the euro contagion feels a lot like the housing crisis in US, we all knew it existed but tried to be in denial until it finally exploded, can a simple German vote end this? only at the height of the market optimism will the final blow be delivered, till that time we are living on stroids, not trying to be pessimistic here but that’s the sense I get that profits in naked long position will be evaporated when the final blows are dealt with

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  5. Germany sends stock buy signal: Wondering why I closed my shorts on the BGZ ETF today (With profits of 5.4% to 7.5% over 48 hours).

    Well, I am not sure the US market has officially bottomed yet, but it’s within a few weeks of it worst case I think time wise. We also have bounced off 1101 twice now, which is the 38% fibonacci of the 666 to 1370 run. Yes, the 1088 figure is still sitting there about 6% or so below current levels.

    However, the reason I’m starting to peer around the corner is the German DAX index.

    If that Index holds and continues higher, I believe its a leading indicator. The index got slammed harder than most and bottomed last week. Its up 8.5% this week. That would be like the DOW rising 900 points this week.

    With that said, I like the Gold stocks down here and am beginning to pick on some of them for upside. Bought NUGT at 28.30 this morning.

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    • Igor says:

      I can’t get rid of feeling that we are near the bottom too. Thanks.

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      • vishal409 says:

        Short bottom yes or maybe,but structural issues will keep traders on tenterhooks, even the line bull in town gold has gotten a new name the tired bull

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      • Igor says:

        Thank you Vishal. I am flat anyway, but patiently waiting for the opportunity to enter a long trade. I am talking about a swing trade, so my time horizon is relatively short, but huge comparing with Lee’s one 🙂

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      • wldcttr says:

        igor, read your comments over the weekend. energy & materials appear to have been the weakest this quarter – down 25%+! i believe you mentioned you were waiting for swing trade in the group. $bpener showing + divergence. anything you looking for in particular? thanks in advance.

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      • Igor says:

        wldcttr, I am going to play the coming oversold bounce on XLE. I like the risk/reward ratio. The other way is to play individual strong stocks in the energy sector. MMP chart looks really good. I didn’t check its fundamentals though. Always do your DD.

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    • Just Lee again says:

      Hi Igor !

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  6. wldcttr says:

    tony, just saw the 1-2 on the spx hourly. thinking the short-term bottom is in for one of the potential counts? or am i misreading? thanks!

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