thursday update

SHORT TERM: gap down opening then rebound, DOW +20

Overnight the Asian markets were again mostly lower: -0.8%. European markets were again also mostly lower: -1.5%. US index futures were lower overnight. At 8:30 the final Q3 GDP came in as expected: +3.0%, and weekly Jobless claims were higher: 359K vs 348K. The market gapped down at the open to SPX 1398. It had closed at SPX 1406 yesterday. In the first few minutes of trading the SPX dipped to 1396, bounced to 1400, and then headed lower. Around 10:00 the SPX hit a new low for the pullback at 1392. Also around ten FED director Braunstein’s senate testimony was released: http://www.federalreserve.gov/newsevents/testimony/braunstein20120329a.htm. The market then tried to rally, hitting SPX 1396 by 11:00, but rolled over again. Around noon the SPX retested the day’s 1392 low, set up a short term positive divergence, and began to rally. Heading into the close the SPX hit 1405, then backed off to close at 1403.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.30%. Bonds gained 12 ticks, Crude dropped $2.20, Gold slipped $1.00, and the USD was lower. Support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum set up a positive divergence, and then rose above neutral. Tomorrow, Personal income/spending at 8:30 along with PCE prices. At 10:00 the Chicago PMI and Consumer sentiment.

The market started the day with its first gap down opening since last thursday. Then, the market was setting up the Minor wave 2 low at SPX 1387 the following day. That pullback, overall, was 27 points. Today’s gap down, and continuation to SPX 1392, also creates a 27 point pullback from tuesday’s 1419 high. Both 27 point pullbacks, thus far, terminated with a short term positive RSI divergence. The first rally off last week’s low took about four hours, and was 12 SPX points. Today’s rally, off the noon low, took about fours hours and was 13 SPX points. Oddly similar. Are Bots running this market?

The pullback, despite being larger than expected, found support within the OEW 1386 pivot range. This pivot has provided support for three pullbacks now, over three consecutive weeks. One of the three potential short term wave patterns was eliminated today. The ominous D wave of an Intermediate 5th wave diagonal triangle. The other two, a Minute wave ii low and an irregular Minor wave 2 underway, remain a probability and possibility respectively. Short term support remains at the 1386 and 1372 pivots, with overhead resistance now at SPX 1406, 1414 and then 1419. Short term momentum displays a positive divergence. Best to your trading!

MEDIUM TERM: uptrend high SPX 1419

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
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44 Responses to thursday update

  1. piazzi says:

    Tony,

    why do you think that an ending diagonal is impossible?

    1340-1410 -> A up

    1410-1385 -> B down

    1385-1420 -> a of C up

    1420- recent low -> b of C up

    c of C up ongoing

    Not my preferred, but why can it not be possible?

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  2. ajww says:

    Talking down oil sure beats opening the strategic reserves. I’m all for it.

    Like

  3. robslob64 says:

    “Oddly similar. Are Bots running this market?”

    LOL…as if you didn’t already know where 70% of the volume comes from…along with our centrally planned economy?

    Tony…really?

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  4. Interesting podcast on current market trend outlook:

    http://bit.ly/GZfmgZ

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  5. pooch77 says:

    For day traders and swing traders..Scotty at market high and lows has not hadanegative trade yet this year.For the price of a case of Leinenkiugels brew(a month) he can make a huge diffrence in your trading account

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  6. CB says:

    re: crude oil
    it’s really interesting, when you look at both contracts, that there is some non-confirmation of that price breakdown. Maybe the market is not buying the “talk.” Money talks, BS walks..Hard stops around 102.40ish…let’s see…maybe it’s just quarterly options exp. 2morrow. http://screencast.com/t/G3LkJE6w http://screencast.com/t/1oB1T5ODtM2d

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  7. redadair says:

    Squeeze em Friday and Mutual Fund Monday at the first of the month.

    Lee I saw where you asked me about oil today, and the overlap was a bit concerning. Needs to get above the short term daily MA’s before I make any moves on the bullish side. The POTUS sure is desperate to get prices down.

    Patrick

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    • DR CL says:

      Much appreciated Patrick as always. Being neutral was a great call
      Yes the POTUS ..Talk OIL down and keep folks emotions high is his plan for re election.

      I’ll go ahead and thank ur side kick Tony also ..even though I think he’s running liquor now on the side in his new car.

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    • Serious double talk definitely coming from the Fed/govt. Obama is trying to talk down oil & gas prices. Then Bernanke talks tough on commodities and how bad gold is. Cost increases are “transitory”. Then the next day will go out and say the Fed is standing by, ready to provide liquidity if needed should there be any problem. Translation: Fed and govt. doing their best to keep commodity prices down and equity prices up. Doing a really good job too. $CCI vs. the SPX has fallen off a cliff in the past 6 months.

      A few days ago I pointed out how oil looked extremely bullish but energy stocks didn’t look so hot. Appears as though energy stocks were leading oil. Suggesting a slowdown possibly?

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  8. piazzi says:

    This should have dragged enough shorts for a good squeeze

    failure to do so may be a an early sign of index setting up for a move into now overdue intermediate cycle low

    above 1385, bears are no significance whatsoever. If they are any good, how come they fail and fail and fail to break some widely watched and automated marker like 34 EMA?

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