thursday update

SHORT TERM: market rebounds, DOW +136

Overnight the Asian markets were mostly lower losing 0.5%. Europe opened higher and closed +1.40%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 381K vs 364K. The market opened higher at SPX 1253 and continued to rally. At 9:45 the Chicago PMI came in slightly lower: 62.5 vs 62.6. Then at 10:00 Pending homes sales were reported positive: +7.3% vs +10.4%. The rally continued until just before 11:00 when the SPX hit 1260. A pullback just past 11:00 to SPX 1257 followed, and then the market moved higher. Nearing the close the SPX hit 1264, and ended the day at 1263.

For the day the SPX/DOW were +1.10%, and the NDX/NAZ were +0.85%. Bonds gained 3 ticks, Crude added 35 cents, Gold slid $7.00, and the USD was lower. Support for the SPX moves back to 1261 and then 1240, with resistance at 1291 and then 1303. Short term momentum rose from extremely oversold yesterday to overbought today. Tomorrow, nothing on the economic calendar. Happy new year!

Inflection points long, medium, and short term. Reviewing the charts after yesterday’s new uptrend high, and pullback, we found the major indices at a very interesting juncture. Under a bearish scenario we can count the DOW having completed five waves down from May11 to Oct11 to end a Major A. Then a three wave, abc, Major B wave possibly completing at the recent highs. The recent DOW highs exceeded the October highs for a clean abc advance. A five wave Major C down would be next. The SPX offers a similar view, yet with the Intermediate c wave, of the abc Major B advance, ending with a failed c. As the current uptrend high is about 2% shy of the October high. The NDX/NAZ uptrend fell short on two parameters. The high occurred early in December, not late, at about 3% shy of the October high. And the entire advance from the early October low looks like a triangular Major B wave. Under a bullish scenario the SPX and NDX/NAZ have a lot of catching up to do. The first few weeks of January are likely to be quite telling.

Short term OEW charts remain positive, as they have since a week ago tuesday. Support here remains in the upper end of the OEW 1240 pivot. Short term support is at SPX 1261 pivot range, then SPX 1250. Short term resistance is at SPX 1278, then the 1291 pivot range. Short term momentum continues to rise after yesterday’s extremely oversold condition and ended overbought. Tomorrow ends the week, month and year. Happy holidays!

MEDIUM TERM: uptrend

LONG TERM: inflection point


About tony caldaro

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62 Responses to thursday update

  1. CB says:

    Tony, thanks for a wonderful site and all your hard work. Thanks everyone for sharing your knowledge. Best Wishes to all of you for 2012!


  2. Tony, what is your opinion on oil? Happy New Year, and thanks for your generosity, time, and dedication to this blog.


  3. magnus1234 says:

    Tony, from this side of the Atlantic. Thank you for all the superb analysis and insights during 2011. A year that has been somewhat harder over here.

    Happy New Year!


  4. mike7x says:

    Today’s gold move. Dead cat bounce, or did it make a bottom in December (2011) instead of Jan/Feb (2012)? Happy New Year? 🙂


    • Lee says:

      Hey Mike
      U could hear on pin drop on that subject today in the blogosphere Silver included.
      That’s the big money question . Happy New Year !


    • rcun says:

      As a trade, tough to say. As a trend, much easier. Terry Laundry’s T-theory has the right side of the bullish gold T out past 2020. Smart Money Tracker is also looking for much higher prices on both gold and sliver (after we bottom…whenever that my be??) Both have attractive track records.


  5. rcun says:

    1257 S&P to start 2011. My bet is that THE BEN BERNANK closes the S&P above that level to call it a positive year. Mid January low – (maybe a panic) that will allow THE BERNANK to institute a new round of quantitative easing??? to once again rally the markets beyond reality!
    Tony and all, thanks for a great year of entertainment and prognostication on the blog.
    Wishing everyone a Happy and Profitable New Year.
    ( Lee, step away from the eggnog 😉 )


  6. Funds have vested interest to close the year positive… above 1258 will do it. We should see a low made on 3rd Jan, possibly gapping down. A bounce to 5th Jan, and a major low made 17th Jan.

    Current time cycles are pressuring a movement lower with the Hurst cycle due next week, the 10 TD low on 10th Jan, full moon on 9th Jan and major cycle low on 17th Jan, coinciding with the 55 TD from 28th Oct peak. Plus, the daily indicators are overbought and looks to cross down
    anytime. They are nowhere near a bottom yet.

    Stay short till 17th Jan.


  7. mckennedy says:

    Monthly chart on S&P & Dow look like they are forming the right shoulder of a h&s that targets approx 880 on the S&P


  8. Lee says:

    1261 *


  9. My end of year market harmonics and notes:
    Cheers all


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