monday update

SHORT TERM: market gaps down then rebounds, DOW -7

Overnight the Asian markets were lower losing 1.3%. Europe opened lower and lost 1.2%. US index futures were lower overnight as well. At 8:30 Personal income was reported higher (+0.5% vs +0.1%), Personal spending lower (0.0% vs +0.1%), and the FED’s favorite inflation gauge PCE prices were higher (+0.2% vs +0.1%). The market gapped down at the open to SPX 1304, dipped to 1302, bounced to 1305, and then headed lower in the opening minutes. The SPX had closed at 1316 on friday. Just past 10:00 the SPX hit 1300, a 33 point pullback from thursday’s 1333 uptrend high. With short term indicators quite oversold it then started to rally. Just before 3:00 the SPX hit 1314, then pulled back to 1310 before closing at 1313.

For the day the SPX/DOW were -0.15%, and the NDX/NAZ were mixed. Bonds gained 8 ticks, Crude lost 60 cents, Gold dropped $9, and the USD was higher. Support for the SPX remains to 1313 and then 1303, with resistance now at 1363 and then 1372. Short term momentum hit quite oversold early and rebounded to above neutral. Tomorrow, Case-Shiller at 9:00, then the Chicago PMI and Consumer confidence around 10:00.

The market met our second criteria this morning, for a Minor wave 3 high at SPX 1333 and a Minor wave 4 underway, when it traded in the low 1300’s. The first criteria was met on friday when the SPX hit 1312. Oddly enough, the market had its best rally since the decline began, (8 points), after hitting 1312 on friday. Then today, the market had its best rally of the entire decline, (14 points), after hitting SPX 1300 this morning. Thus far we have had a 21 point decline, and a 20 point decline, separated by an 8 point rally. Nearly perfect fibonacci numbers.

The 14 point rally that followed the SPX 1300 low could be signalling the 33 point decline (SPX 1333-1300) was all of Minor wave 4. For now, it appears too short in time/price and more likely just: wave A down to SPX 1300, wave B up to 1314 or higher, with a wave C down into the lower range of the OEW 1291 pivot to follow. Our short term OEW charts, which turned negative today, suggest this scenario. Short term support remains at the 1313, 1303 and 1291 pivots. Overhead resistance is at SPX 1327/33, 1345/47 and the 1363 pivot. Short term momentum is rising. Best to your trading!

MEDIUM TERM: uptrend high SPX 1333

LONG TERM: bull market

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

About tony caldaro

Investor
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37 Responses to monday update

  1. DR CL says:

    If CL has any predictive value ES in a C wave down from the open

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    • DR CL says:

      No more bailouts the POTUS said in the SOTU…except one more guys

      http://www.marketwatch.com/story/obama-mortgage-refi-plan-to-be-rolled-out-2012-01-31?link=MW_home_latest_news

      Sure the banks will pay that fee but what will the banks do to off set that fee ? “)

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      • tony caldaro says:

        Add it to the mortgage?

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      • CB says:

        Hmm…thanks Lee, interesting stuff the Pres. is working on, again… 😉 Just like you’ve said the other day, it’s just another day in paradise – for socialized finance this time (oh no, not again!)..let those innocent bank customers carry the burden for all those who foolishly over-extended themselves…anyways, banks are gna save on some avoided foreclosures ’cause of that , it seems,so they should be better off even after a new tax on finance …
        so CL is predictive….but finance will get in the way for a day or so, then??

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      • DR CL says:

        Hey Tony

        If by some chance the person qualifies maybe. But I was thinking they’ll just raise fees on the paying customers.

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      • DR CL says:

        Hey C B

        It’s an election year so it seems like the right thing to do 🙂
        I just think the whole game has changed with strategic defaults on mortgages.
        You’re better off wiping everybodys credit card clean than this mumbo jumbo IMO

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      • CB says:

        You are so right Lee, ..let’s punish the “middle” who will pay for the “bottom”, it’ doesn’t make sense in a free market system cause it’s fundamentally dysfunctional & unfair, but it makes sense as a riot-prevention measure..so that’s what they are doing….Obama was elected to make sure we don’t have some big fact Greek riots here…and I am not sure how these strategic defaults work cause I’ve never planned one…
        And it’s great to see you back Lee….actually, what’s your excuse for not running for President, huh? 🙂

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      • DR CL says:

        Hey C B
        Do they let High School drop outs run for President ? 🙂

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      • CB says:

        Lee, you were just thinking faster than all the other kids and you prbly. couldn’t put up with all the slowpokes, right?..that’s my theory… 🙂 and self-taught knowledge is better than what they can teach you in schools…plus remember people with degrees get hired by people without degrees on Wall Street…and mentally speaking Wall Street is basically considered ahead of Main Street… so..I think I’ve taken care of your biggest “excuse,” …ur ready Lee. 🙂

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    • redadair says:

      Looking for a good spot to get long crude, but today was definitely an ugly reversal day.

      Patrick

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      • DR CL says:

        Patrick

        Sure was ..
        It’s never easy but today after 9:00 am CT it almost was…..almost
        It blew thru every pivot after getting a few ticks from the R3 this am and came within 17 cents of S2. Just sellem was the mood

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    • redadair says:

      Lee do you use standard floor pivots ?

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  2. blubrd67 says:

    Tony,
    Since we charged up all the way to 1321 this morning, isn’t that confirmation that Minor 4 was done yesterday, and we are already in Minor 5? (with action today possibly being minute 1 and 2 of minor 5?)
    If this is still C, it seems 1321 is too high to go to.

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    • tony caldaro says:

      Blubrd, Minor wave 2 had lots of rallies and declines quite similar to the beginning of Minor 4.While the 33 point decline was the biggest since Minor 2.The 21 point rally is still within the context of a 61.8% retracement.Today’s decline was pretty much straight down to 1307.Let’s see what the market can do with today’s low.

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  3. edelschmied says:

    Hi everybody,

    I dont know how important that is but the credit default swaps for portugal has increased, beginning at 18.01.2012. May be the next challange for europe…

    http://www.bloomberg.com/apps/quote?ticker=CPGB1U5:IND

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  4. swany63 says:

    C down to New Lows or stopping in triangle 1301-1303 ES.
    Good Luck

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