tuesday update

SHORT TERM: consolidation day, DOW +33

Overnight the Asian markets gained 1.2%. Europe opened higher and closed +0.6%. US index futures were higher overnight as well. At 9:00 Case-Shiller reported a 0.6% month over month decline in housing prices after a five month 3.8% gain. The market opened slightly higher at SPX 1194, dipped to 1192, then resumed yesterday’s rally. At 10:00 Consumer confidence was questionably reported higher: 56.0 vs 39.8, and FHFA housing prices were reported higher: +0.9% vs -0.1%. The market continued to rally until about 10:30 when it hit SPX 1204. Then from short term overbought levels it started to pullback. After a drop to SPX 1198 by 11:00, and a bounce to 1203 by 11:30, the market pulled back further. Also at 11:30 FED vice chiar Yellen’s speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20111129a.htm. The pullback continued until 2:00 when the SPX hit 1193, yesterday’s close. It then rallied to SPX 1201 by 3:00 and pulled back to 1195 to end the day.

For the day the SPX/DOW were +0.25%, and the NDx/NAZ were -0.50%. Bonds lost 8 ticks, Crude rallied $1.60, Gold added $2.00, and the USD was lower. Support for the SPX remains at 1187 and then 1176, with resistance at 1222 and then 1240. Short term momentum hit overbought and pulled back to neutral. Tomorrow, the ADP index will be released at 8:15, the Chicago PMI and Pending home sales around 10:00, then the FED’s beige book at 2:00.

The market continued its rally today hitting SPX 1204. A 45 point rally, 3.9%, in two days. This morning we added a potential short term count on the DOW charts, suggesting the contracting triangle formation many observed in mid-Nov between SPX 1227 and 1278 may still be in play. If it is, that triangle could be counted as a Minor B, and the recent low at SPX 1159 could have ended a Minor wave C. If the market holds the recent low in coming weeks this is probably the count. If not, the count we have been tracking: Minor A-B and Minute i-ii-iii with iv underway is still in play. Short term support and resistance levels are the same are yesterday. Best to your trading!

MEDIUM TERM: awaiting downtrend confirmation

LONG TERM: neutral

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

About tony caldaro

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195 Responses to tuesday update

  1. rc1269 says:

    Death by a Thousand Counts

    I officially can’t read this site anymore. No offense to Tony and his work, which I think is great. But all of the different opinions only serve to muddy my thought process and I end up second guessing my own calls, which I’ve discovered over time tend to me more correct.

    After the October rally I told myself, “this is a bull market, when we sell off back to a decent Fib point I’m getting in big.” 1158 looked like a great spot to me. We got down there and hung out for two days. We rode along a strong Fib point for two days and I didn’t buy, despite my better judgement. And it was the exact point I was looking for. Why?? Because the folks in this forum flipped to bearish. Because a preferred count was bearish.

    Am I nuts? I feel like it.

    This feels like a bull market. Europe is entering a recession and their banks on the verge, and this market refuses to crack. A coordinated and pointless central bank action and we go ballistic. That is a lot of pent up demand. Demand that seems to abhor every other asset class. There are just too many powerful forces pushing people into stocks.

    One cannot invest on fundamentals, which would tell you to sell sell sell. Bernanke is going to guarantee that. Stupid me for forgetting that for even a moment. Hold your nose and buy the dips. That is the only trade that will outlast a day. Sadly.

    I hate the Fed for making me a stupid investor. I am forced to buy what I don’t want to buy. Bernanke, if you’re reading this, you are not a good person. You’re a drug dealer. Every time your clients try to go clean and get into detox, you give them another hit the first time they start to exhibit withdrawals. I guess that gives you job security. But there is no painless solution, and we only allow painless routes to be taken.

    Be the monkey they want you to be – BTFD

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    • tony caldaro says:

      RC, We appreciate your view of the credit markets.Please keep us informed.

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    • wldcttr says:

      rc, i understand your frustration. i think the markets have left a lot of people scratching their heads as of late. i havent been able to hold many positions overnight for a few months, scared of what i would wake up to the next morning. sometimes it kept me from gains, but also kept me from losses too. at least i could sleep at night.

      however, i think 2008 is clearly in the mind of central banks & global heads – hence today’s actions – while 2009 and 2010 is in the mind of funds and investors – many missed the major moves. markets will be supported until the central banks are out of ammo because they’ve seen what happened in 08. if the economies actually strengthen, central banks can ease off the pedal, but if the economies deteriorate further, well, then we’ll all be in food lines, including those damn permabears, lol!

      i hope that officially cant read this board means you’re not leaving, the posts on the credit market are great. tony’s blog keeps me sane, um, most of the time that is – many thanks to tony et al!

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    • CB says:

      Rc, your comments are invaluable. Thanks!

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      • Dr. CLee says:

        as is yours C B
        ES futures traded right to ur apex on the chart u posted this am.:)

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      • CB says:

        Thanks Lee. You are the best – u know it. 🙂 You keep things real 4 us. And ur sense of humor is ….priceless, of course. Wow, what a day.

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      • Dr. CLee says:

        C B
        It was crazy and unfortunately with last fridays redemption by the public was followed just 2 1/2 trading days later with guys I know blowing out their day trading accounts. Thats messed up
        C B
        I consider you a legacy here. amigos !

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      • Igor says:

        Couldn’t agree more with CB. Lee, you are the best, despite all hate mail I keep getting from you after every successful trade 😆

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      • CB says:

        Igpr, did you get any hate email, really?…c’mon let’s see it…lol…

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      • Dr. CLee says:

        Igor
        I hate it when ur dead right 🙂
        Ur the real deal Igor!
        I wasnt sure it was really u when u started posting again here haaa sorry about that 🙂
        BTW I still have that winter pic of a beautiful home u posted from Siberia ? As one of my screen savers

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      • CB says:

        just kidding Igor..and nice QQQ trade…I was going to ask you what your P&F settings were on 60 min b/c I wanted to retrace how you set that stop loss…but ran out of time today..
        Gee, that white mansion was a great pic, Lee. I had it for a while..then I lost it…if you guys can post that picture again sometime, I’ll save it for good. 🙂

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    • RC,
      I’ve been in this game for 13 years and this is the toughest environment I have ever seen. Right now I can’t even tell you if we are in a cyclical bull or bear market. Headlines whip the market around 3-5% overnight. Regardless of what you read on this board I don’t think I know anyone that hasn’t been whipsawed in a mad way multiple times in the past 3-4 months. I think I have only made two trades since 9/27/11. Until I get a better feel for things and the new rules of the game I’m staying on the sidelines.

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    • Igor says:

      RC, I read only Tony’s updates and comments from people who proved to be heard. I, usually, skip the other stuff. Your comments is a must read. Please, keep posting. With time you will know that there is really valuable thoughts and insights from others in the comment section, you just need to put a filter. And if this is the bull market, indeed, then how much you missed? Only 7%. TIA

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