holiday update

SHORT TERM: most markets closed worldwide, YM (DOW) -120

Overnight mostly only Asian markets were open: -0.1%. European markets were closed. US index futures traded throughout the night and ES (SPX) was +3.0 prior to the Payrolls report. At 8:30 monthly Payrolls were reported lower: 120K vs 227K, well below the 230K estimate. The Unemployment rate, however, dropped: 8.2% vs 8.3%. Stock index futures sold off quite dramatically after the report, and Bonds rallied. At the 9:15 EST AM close ES (SPX) was -15.25, NQ (NDX) was -28.50, and ZN (Bonds) were +27 ticks. In Forex trading Gold gained $11.00, and the USD declined.

Last night the FED reported an uptick in the M1-multipler, but another downtick in the Monetary base. It appears our Primary wave III, in the monetary base, peaked in February at $2.753 tln. The monetary base is currently at $2.659 tln and declining. Economic reports that come in later in the day will be included in the weekend report.

Should the market open monday at current futures levels, the SPX will be challenging the lower end of the OEW 1386 support pivot, and possibly entering the 1372 pivot range. This would create the largest pullback since December’s 65 SPX point decline. With the recent diagonal triangle pattern in place for Intermediate wave v, a new downtrend is likely underway. Will cover this and what it suggests in the weekly update. Enjoy the holiday!

MEDIUM TERM: uptrend likely topped at SPX 1422

LONG TERM: bull market

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

About tony caldaro

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27 Responses to holiday update

  1. massoodh says:

    Hi Tony,
    Thank you for your great analysis. Could you please tell me what is your opinion on oil/ $WTIC? Is it in minor wave 4 downtrend of intermediate wave iii uptrend? Thank you very much.

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  2. CB says:

    Thanks for the update Tony. Interesting that ES traded down to 1372 and then bounced back up to 1390 at the close…
    The data is quite puzzling, isn’t it… how come that the unemployment rate actually dropped when job creation has been so weak? Also, is one of the numbers more susceptible to seasonal deviations than the other?…and ultimately, which one does the Fed pay more attention to ?… Happy weekend everyone.

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    • vishal409 says:

      Many things aint making sense in the last few yrs of artificial liquidity,have a nice weekend CB

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      • CB says:

        Thanks Vishal. Same to you! Btw, looking forward to updates on gold. Seems that ur jewelers are a force to be reckoned with 🙂

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      • CB says:

        meants to say: looking forward to ur updates, Vishal…

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      • vishal409 says:

        Indians dont buy gold, they HOARD gold! LOL! Its like, how eveyone in states has a credit card (atleast one!) here in india gold jewellery is compulsory in every household as a tradition from generations.On a serious note, a lot is being made of indian demand for gold, but actually due to 1) rise in gold price 2) currency weakness & 3) high inflation, gold demand is falling drastically but as indian stock market is in a bear trend, the demand hasnt fallen, relatively
        I see capitualtion below 1500 before bulls can dream of past glory!

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      • vishal409 says:

        by the way futures have spoiled the good friday, hehe

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    • S2 says:

      On days when only futures are open, the prior SPX trading day’s settlement is still shown, but the last trade was at ES 1375 which is approximately SPX 1380. Unless some positive event occurs over the weekend, SPX should drop well below this week’s low on Monday. I was using 1391 as confirmation of the downtrend. There is support convergence at 1380ish and the entire uptrend line from 1075 resides at 1360ish with the 50dSMA in between. So, I am expecting 1 of 2 scenarios next week assuming 1391 is breached on Monday and SPX forms a mini-cycle low late next week as my work suggests. 1) SPX finishes w1=w3=w5 from 1422 to 1382ish and then recovers to 1400ish before testing 1360-1370. or 2) SPX breaks below 1377 in a minor degree wave 3 with some choppy 4-5 action at 1360-1390 into late next week. Either way, I’ll be surprised if SPX turns Tony’s 1372 pivot into resistance for more than a few hours, but, like Tony, I suspect the next bounce will be of the dead-cat variety and SPX will test 1290-1320 around May 3 or May 18.

      BTW, the unemployment rate dropped because the labor participation rate dropped AGAIN. People are steadily giving up on finding a job, losing unemployment benefits and retiring. That trend is highly unlikely to get reversed for years, except for the occasional multi-month statistical reprieve, because the economy is not likely to reach consistently high growth in the next 2-3 years, baby boomer retirements are only going to pick up their pace and we can’t win our jobs back from China, India and elsewhere very quickly. So, the average person will feel much more economic pain than the popular published numbers reflect for years to come.

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      • Good to hear from you S2. I see support at 1333-1340 and 1300. Sentiment is not bullish enough to support this being a major top but it wouldn’t surprise me to look back 3 months from now and be about where are right now. Q4 and Q1 were very strong. I think some digestion of those gains is in order. Hope you have been well.

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      • CB says:

        S2 , great insights and analysis as always! Thanks so much. Was relying on Bloomberg’s closing number…apparently 1390 was not correct.

        Thanks Vishal. Very interesting! ( Btw, Indian Jewelers…they’ve just called off their strike…)
        OK, I get what ur saying on gold Vishal: “look, but don’t touch” ..still

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      • tony caldaro says:

        Thanks for posting S2 happy easter

        Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!

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    • tony caldaro says:

      CB, Have ES with a 1372.75 low and a 1375 close.The unemployment rate does not include the long term unemployed.FED pays attention to job creation/destruction. happy easter

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      • CB says:

        Thanks very much Tony. Ben must like bad data..makes him feel useful.. It seems a bit unlikely 1380 would not hold on a closing basis on Monday and trigger a deeper corection ..mainly with the April 15 IRA deadline coming up..but the Fed may have other plans.. http://screencast.com/t/uLfMBSZl
        Looking forward to ur weekend update and happy Easter to you too !

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  3. hi tony, new to your blog, but absolutely love your analysis and work, learning more bout OEW each week. was wondering if there was a place I could read some more about the wave count basics to educate myself? i.e. I notice the wave counts for commodiites and currencies are slightly different than stock indices at times. (A,B, C, X, etc). thanks and have a happy easter

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  4. jaja2121 says:

    Tony
    Since there has been a ton of underlying support for the mkts – and it would have to be assumed if the economy deteriorates the FED will launch a new arsenal of liquidity – what would the count look like if we bottomed around 1372 SPX? Could that be considered a shallow major 4?

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  5. M1 says:

    Thanks Tony, it looks the market is unfolding as expected.
    One question: what would confirm that the primary wave C have ended for the small caps (the count posted on the RUT charts).
    Have a great weekend.

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  6. Brent Calis says:

    Half of the expected jobs…Monday is going to be interesting!

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  7. rc1269 says:

    Thanks for the update Tony. Enjoy your weekend!

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