friday update

SHORT TERM: consolidation day, DOW +22

Overnight the Asian markets were all higher. Europe opened higher but closed mixed. US index futures were lower overnight. At 8:30 Personal income was reported higher: +0.1% vs -0.1%, Personal spending was reported higher: +0.6% vs +0.2%, and PCE prices were reported flat: 0.0% vs +0.1%. The market opened lower at SPX 1280 and continued to slip until it hit 1277 at 10:00. At that time Consumer sentiment was reported higher: 60.9 vs 57.5. The market then tried to rally but could only reach SPX 1286 by 11:30. After a pullback to SPX 1279 by 12:30 the market drifted higher in the afternoon. Nearing the close the SPX hit 1287, and then ended the week at 1285.

For the day the SPX/DOW were +0.10%, and the NDX/NAZ were mixed. Bonds gained 23 ticks, Crude slipped 55 cents, Gold dipped $2.00, and the USD was higher. Support for the SPX remains at 1261  and then 1240, with resistance at 1291 and then 1303. Short term momentum eased back from extremely overbought yesterday. Last night the FED reported a decline in the M1-multiplier, but an increase in the Monetary base. Today the WLEI ticked up a notch to 40.0% vs 39.9%.

The market opened lower today and pulled back below yesterday’s late hour reaction low at SPX 1279. Then after a rally to SPX 1286 the day was essentially over. Quite a narrow trading range after weeks and weeks of volatility. The VIX, which measures such things, is now at its lowest level since early August, a reading of 25, when the SPX stood fairly close to where it is today. The pullback, thus far, from the uptrend high of SPX 1293 has been 16 points. Would expect more follow through, on the downside, monday to complete this 20+ point pullback. Then another rally to complete the entire complex zigzag pattern from SPX 1075. Will cover the rest in the weekend update. Best to yours!

MEDIUM TERM: uptrend high SPX 1293

LONG TERM: bear market highly probable

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

About tony caldaro

Investor
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26 Responses to friday update

  1. Good one from Barron’s : Sometimes when enough folks are positioned for the world to end rapidly, the mere suggestion that it will occur gradually is enough to energise the bidders.

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  2. My latest SP 500 chart… shows ABC rally
    A 159 points
    B 23.6% retrace to 1195
    C 61% of A, to 1292

    Now moving averages are (20 day MA) 5.3% below closing price Friday. This means there is MOST likely a retrace of the late week rally back to the low 1240’s.

    http://chart.ly/cfc77uf

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  3. valunvstr says:

    Tony,

    Wondering if you can help a guy out. Many are suggesting that this might be more like 1998 and not a new bear market. I am still in the bear market camp, however, I am now starting to see some things that might suggest it is not. The monthly RSI 14 is now comfortably above 50. Not a sign of a bear market. The monthly MACD histogram is improving and not widening as it did at this point in the cycle for the past two bear markets. We have broken back into the Fib Fan line channel that was broken a few months back (the fan line drawn from 667-1219. We are back about the middle of the Monthy Bollinger Band. Usually once below, you stay below until back in bull market. Above the 200 day sma. About to break above the weekly Ichimoku (although that indicator does not impress me that much). The monthly candle is a huge bullish engulfing candle too. There are more but why go one. I understand that you focus on EWT but since you also use other indicators , like RSI and MACD, I thought you might have an opinion and have a minute to share your thoughts on the above comments. Thanks!

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  4. radrian5 says:

    Test.

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  5. Pingback: friday update

  6. mike7x says:

    I’m really looking forward to this weekend’s update! Tony, next week seems like it may be “the” turning point in the SPX. A pullback early in the week, to complete the 20 pts, seems likely going into the FOMC meeting. After the Fed’s announcement on Wed. (depending on what “they” say) seems like the time for an SPX rally to the 1308 pivot, to end this uptrend? And, the start of a new bear cycle (except in gold)?

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  7. CB says:

    Thanks, Tony!

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  8. Yep, Im sticking with 1306 SP 500 pivot and around 130 on the SPY ETF as still most likely before any type of top I would even attempt to swing short. It is what it is…

    Going into next week Im long PMCS from 6.12 today on the JP Morgan joke downgrade, it closed at 6.32 on big volume late in day. I am long VHC from 19.43, looking for 22-23 and then 35 possible.

    Gold will definitely push to 1900 within 4-8 weeks in my opinion

    Best of luck to all

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    • mike7x says:

      Gold looks really good long-term. But, will the gold miners (stocks) pull back along with the SPX, even if/when gold continues to advance? In the past the miners, which are still “stocks” of course, have declined with the market (SPX) in bear cycles.

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      • alexh110 says:

        Re: Gold, if that does happen it would be a break with precedent.
        I’m looking at 2003, 2006/7, 2009/10. In each case it took many months to push to new highs following a sharp peak, like the one we saw this summer. In all but one case, it took a long time to even re-test the previous high.
        Looking at precedent there seems to be a strong possibility the weekly RSI will reverse when it touches overbought.

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        • tony caldaro says:

          Alex,Agree. The recent price action would suggest a gradual climb after an important high.This is the same thing that occurred between 1967-1978.However, in the blow off stage Gold did not act that way in 1978-1980.It is already up 14% off the September spike low and hardly anyone has given it a second thought.

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  9. wldcttr says:

    thanks & have a great weekend. look forward to the weekend update.

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