friday update

SHORT TERM: market opens lower, DOW -241

Overnight the Asian markets were mostly lower. Europe opened lower and closed -1.9%. US index futures were also lower overnight. At 8:30 Personal income (-0.1% vs +0.3%) and spending (+0.2% vs +0.8%) were reported lower. Also, PCE prices were lower +0.1% vs +0.2%. The market opened lower at SPX 1151, and then bounced around between the opening level and 1141 until 10:00. The SPX had closed at 1160 yesterday. At 9:45 the Chicago PMI was reported higher: 60.4 vs 56.5, and then at 9:55 Consumer sentiment was reported higher as well: 59.4 vs 57.8. The market then rallied to SPX 1153 by 10:30, pulled back to 1143 by 11:00, and hit the high for the day at 1154 around noon. After that it started a more sustained pullback. Heading into the close the SPX hit its lowest level of the day at 1131, and closed there.

For the day the SPX/DOW were -2.35%, and the NDX/NAZ were -2.65%. Bonds gained 10 ticks, Crude lost $3.45, Gold added $5.00, and the USD was higher. Support for the SPX drops to  1107 and then 1090, with resistance at 1136 and then 1146. Short term momentum bounced off the positive divergence yesterday, but now continues to move lower despite divergences. Last night the FED reported the M1-multiplier declined, but the Monetary base was higher. Today the WLEI was reported lower and now at a contracting 42.8%.

The market opened lower today following Europe’s lead. The European indices just experienced their sharpest decline since Q3 2008. The US market continued lower but found support between the OEW 1136/1146 pivots. After a rally into the mid-1150’s by 10:30 the market spent the rest of the day between that opening range until the last half hour of trading. The short term OEW charts remain negative and now require a rally into the 1168 pivot range to turn positive again. Short term support is at the low 1120’s and then the 1107/1090 pivot ranges. Short term resistance is at the 1136/1146 pivot ranges, and then the mid-1150’s. Short term momentum is starting to act like we’re in a third wave. Should be quite an interesting weekend update. Best to you and yours!

MEDIUM TERM: downtrend low at SPX 1102

LONG TERM: bear market highly probable


About tony caldaro

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11 Responses to friday update

  1. The indices found another way to add indecisiveness to the current market pattern this week. During most of the recovery, the indices have focused on giving us huge swings in both directions to keep both the Bulls and the Bears paranoid and in check. Now, they’ve added index divergences to their bag of tricks, courtesy of more buoyant price action on the Blue Chips and weaker action on the

    Techs. On the week, the Dow managed a gain of about 1.5%, while the NDX lost about 3%.

    Regardless, nothing has been resolved over the past five sessions as the same indecisive movement continues. But it is interesting to note that the Techs are lagging here. Often times, they lead market moves. They were stronger during most of the recovery. So know that they’re proving to be weaker, maybe it’s an indication of a resolution to this funky action sooner rather than later. We all know it couldn’t happen soon enough.

    On Wednesday, we laid out all possible labelings of action off the 2011 highs. The purpose of that was to understand where the probabilities lie and when and how we might expect resolution of this pattern. But the other unsaid purpose was to show you exactly why we can’t possibly have confidence in the near-term action, because there are so many ways this could play out. By all reasonable measures, all signs continue to point to an eventual southbound resolution, and any effort to justify something else just gets more and more far-fetched. But other than that, it remains a waiting game.


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  3. winslow80 says:

    “Short term momentum is starting to act like we’re in a third wave.”
    “Short term support is at the low 1120′s and then the 1107/1090 pivot ranges…”
    So what is the potential for a reprise of mid-2010, when SPX took out the 1040 low but bottomed just thirty points lower?
    In other words, how confident are you at this point that this is wave three? Copper appears to be in three of three, and the CRB Monthly looks like it could be in the early stages of an annihilation.
    But just to tamp down my own burgeoning enthusiasm for the bear case, do you have a scenario in which SPX holds 1090 and then begins a significant advance?
    Thanks as always.


  4. M1 says:

    Hi Tony, I am a bit confused abt the new posssible count posted in green …these are minor 1 and of interm v, right ?…or are you suggesting these are major 1 and major 2 ??


  5. zimbabweanimike says:

    The lady was mocked for a year about C.
    And a simple look at the herd is not heathy. Not sure if this screen comes thru, anyway have a great weekend:)


  6. scottycj1 says:

    The close below 1150 today wiped out the wave C
    short squeeze from hell rally I thought could happen. Looks as though C was the 20th.
    I still believe we are going to have a 5 wave decline to finish
    the large C wave down of this big corrective ABC to about
    1015. It could be over in as little as the next 3 weeks but before year end.

    Have a great weekend


  7. canadianloonie says:

    Looking forward to your update!
    Thank you Tony you are the best!


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