tuesday update

SHORT TERM: market gaps up again but keeps going, DOW +194

Overnight the Asian markets were mostly lower but gained 0.3%. European markets opened lower but gained 2.4%. US index futures were higher overnight. At 8:30 Housing starts were reported lower: 654K vs 698K, but Building permits were reported higher: 747K vs 717K. At 9:15 Industrial production was reported flat: 0.0% vs 0.0%: http://www.federalreserve.gov/releases/g17/current/default.htm. The market gapped up at the open to SPX 1376 and continued to rally. The SPX had closed at 1370 yesterday. The market cleared the OEW 1372 pivot range around 10:30 and moved even higher. At 2:30, with small pullbacks along the way, the SPX hit 1393, the upper limit of the 1386 pivot range. A small dip into the close ended the day at SPX 1391.

For the day the SPX/DOW were +1.5%, and the NDX/NAZ were +1.9%. Bonds lost 7 ticks, Crude rallied $1.30, Gold slipped $2.00, and the USD was lower. Support for the SPX rises to the 1386 and 1372 pivots, with resistance now at the 1440 and 1499 pivots. Short term momentum is now quite overbought. Tomorrow, the ECB meets in Frankfurt.

The market gapped up again at the open and just kept on going today. While we saw a possible higher high than yesterday’s secondary rally to SPX 1376. We did not anticipate this much of a surge. When we review the action from the expected uptrend high at SPX 1422, we see seven waves down to 1357. After that we had an abc rally to SPX 1388, then an abc down to 1365 yesterday. Now we have had a rally from that SPX 1365 to 1393. This looks more like a larger abc up from SPX 1357: 1388-1365-1393.

Since the first decline, 1422-1357, took five tradings days. And this rally, 1357-1393, has also taken five trading days. They appear to be of the same wave degree. Therefore, we have upgraded the initial decline to an Intermediate wave A, and the current rally to Intermediate wave B. Project, monitor and adjust. This would suggest a declining Intermediate wave C should soon follow to end the correction. With Int. wave A travelling 65 points, Int. B could retrace 0.50% to 61.8% of the decline, or SPX 1390- 1397. The market hit that range today. Also, the upper limit of the 1386 pivot range is SPX 1393, which was today’s high. The next level to watch would be SPX 1402, or the high after the first three waves down from 1422. Short term support is at the 1386 and 1372 pivots, with resistance at SPX 1397, 1402, and then 1414. Short term momentum ended the day quite overbought. Best to your trading!

MEDIUM TERM: DOW downtrending, SPX will likely follow

LONG TERM: bull market

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

About tony caldaro

Investor
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61 Responses to tuesday update

  1. rc1269 says:

    Why are people talking about the Spanish bond auction as if it’s not a completely foregone conclusion? I don’t think there’s such a thing as a failed Spanish bond auction. Let’s get this straight – Spanish banks buy Spanish bonds. If they don’t, Spain auction might fail and all of Spain gets hit, especially… Spanish bank stocks. So, they buy Spanish bonds. Not only that, they can pledge their billions of existing Spanish bond holdings in the ECB LTRO to borrow money to buy more Spanish bonds. So why wouldn’t they buy all the Spanish bonds, if their own fate depended on it and they can do it with essentially free money?
    I think anybody hoping for “bad news” out of Spain tomorrow might be disappointed. just my 2 cents

  2. CB says:

    Tony, you mentioned two numbers on the shanghai comp. a while ago 2310 and 2400, Ibelieve.. we’re now at 2380…are we supposed to start getting excited about those waves yet?

  3. rc1269 says:

    Lee – is everything still going according to your plan?

    • Lee says:

      RC even more so with this rally in ES
      yes sir.
      these are my kind of markets I will enjoy it while it lasts.

      • rc1269 says:

        That’s good. Just want to make sure all is well. How’s the weather out west right now? (I’m in A2)

      • pbnj123 says:

        Lee – sorry not up to speed on your posts but what are you looking for in your “plan” if you don’t mind me asking.
        Thank you and i will understand if you do not wish to divulge – just asking.
        Thanks again

      • rc1269 says:

        The first rule of Lee’s plan club – there is no Lee’s plan club

      • pbnj123 says:

        Haa – okay got it – thanks

      • CB says:

        RC – why speculate on anyone’s plans or motives…you can’t really know cause ur not in their head.. I’d be surprised though if someone of Lee’s caliber would want to stay tied to a post the whole day for a few bucks just to give us a free lunch…I man that would be awfully nice …but why ?
        Lee, cheer up, we’re not bugging you…we’re happy with everything you give us so generously and spontaneously no matter form you choose :))

      • CB says:

        aha.typos again…meant to say”” I mean that would be awfully nice…”
        and …”no matter what form you choose”

      • Lee says:

        R C

        “The first rule of Lee’s plan club – there is no Lee’s plan club”
        Hahahaha You are on your way to total enlightenment. If I had a dog my laughing would of woke it up with that post RC ! Glad ur here man .
        I’m in MI and it’s mid 60′s and sunny

        pbnj123
        What RC said :) But I’m here to help if you really need some.

        Hey C B

        Did you just say Free Lunch ? Im there !
        Guys the lead up to my “blog” was a performance art piece that I performed here for the entertainment of you all. Thanks to Tony I get all the freedom of expression and hindsight calls that a boy could want here.

      • CB says:

        Haha..Hello entertainment powerhouse… nice performance, Lee!…we all got the joke now. …And a ”free lunch” 4 u…wel I am a lousy cook, but free is free, right?..lol..oh, and I don’t accept any complaints afterward….so you sign a release and we can talk about it :)) …hey, enjoy ur MI – looks like you deserted FL quite early this year…hope ur weather doesn’t get too bad…

      • Lee says:

        Hey C B :)

        Thanks !
        We had enough of FL according to my wife :)
        It’s too hot for her now.

      • CB says:

        yeah, such is life in the tropics, isn’t it?.. well it must be nice to be able to stay around water year-round Lee & you get to go fishing all the time which is kinda related to trading almost ;)) …I mean you wait and wait and wait, and then you get that little dip & good things start happening all of a sudden.. …just making stuff up but that’s what it seems like…lol…Hey, I went to a webinar the other day…some guy doing his trading live on his laptop on the CME floor…so he had his 5 min & his 60 min charts up with BB and stochastics only & he kept commenting once in a while about what the price was doing & you could hear all that background noise…I haven’t learned anything new but …well, I liked the noise…I am not sure what that they’re doing…maybe trying to get new business from folks..it was fun for a few hours though.

  4. Lee says:

    ZC back at daily support . Gap filled the hard way as it’s having it’s way with both sides of the trade. *666 HDIVOT

  5. rc1269 says:

    Looks like algos went back into sell mode at 11am

  6. Lee says:

    Morn
    1386 pivot

    • pbnj123 says:

      Lee – good morning
      Last week you stated you were working on a new site – how it that coming?
      It peaked my interest.
      Thank you

    • pbnj123 says:

      Lee
      Very sorry to hear it didn’t work out.
      I wish I had had a chance to see it.
      Thanks for the reply.

      • H D says:

        Ya- where’s that site Lee. :lol: Keep after him pbnj123. I know he wanted to collaborate with David B on some xwavestwitterblogs.comorg

      • CB says:

        What’s up with all those sad and sorry feelings here?…isn’t it interesting how we always find the energy to do things that we really want to do and just can’t find the energy to do things we don’t really want to do….we always get precisely what we want…it really is amazing when you think about it

  7. rc1269 says:

    Morning Tony,

    What do you think about the prospect of this Int B wave also making a diag triangle, similar to how Wave 5 of Major 3 just ended?

  8. M1 says:

    If this is minute wave c unfolding(or an impulsive wave 3 up), I only see three waves up to yesterday… so expect to see a forth wave down and a fifth wave up before any important correction…we shall see.
    GL and have a good day.

  9. 5wavemodel says:

    I think we are going to see 1400 on the SPX one more time, if only briefly.

    Steve

  10. M1 says:

    Tony, I was calling for a bottom a few days ago, and I see you are still bearish even when the dow is 415 points up from the lows of last week. =(
    If you are correct, then 12710 should be the first wave down and this huge rebound may be only an abc counter trend rally. So the next wave down should give us the clues (if we get one).
    My question: Could this bearish count be possible.. http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=2&dy=0&id=p49768250953&a=250564629
    Thanks

  11. what’s your take on Apple? if you have one.
    good stuff you got here. thanks

  12. TJ—

    Primary 1 was indeed huge because the cataclysmic drop into it was way overdone. 666 from 1500′s really…

    So wave 1 makes sense to be a huge wave, and 3 not as big…. and 5 less than 3 very possible.

    I have two counts still considering

    1- 666-1221; 2- 1221-1010; 3-1010-1370; 4- 1370-1074; 5-1074 to 1422 so far

    Wave 4 though dipped into 1, and for some that is a no-no… but I think could be valid.

    Or…

    Tony’s count

    666-1370 1; 1370-1074- 2; 1074-1422 so far for 3….

    we shall see…

    much past 1434 then my potential first count above is toast…. and I expect it to be toast…

  13. newbie980 says:

    Tony

    I am a newcomer to your blog, and found your blog a couple of weeks ago via Stockcharts.com public charts list. I have learned a great deal during those 2 weeks, and admire your OEW process, and the give and take on the blog. The intermediate B wave in SPX, looks like a 3-3-5 FLAT that ended today or should shortly tomorrow? And then 5 wave C WAVE to 1300 to 1340 (1329 if C=A, and B ended today?)

  14. THANKS Tony , love your blog you’re the man….. I have learn much from your work. I am spreading the word Rich

  15. canadianloonie says:

    Super Tony
    A quick question…
    Do you have the secular bull run in commodities ending
    At about the same time this cyclical bull run in the SPX ends…
    Around beginning to middle 2013….shouldn’t the commodotity bull
    Keep running up to 2016 ..once this secular bear in stocks ends?

  16. tjhere says:

    Will the real Wave 4 please stand up?! Just my 2 cents but I see a count that would label the tentative end of Wave 3 as shown on SPX as Intermediate iii vs Major 3 or if the DOW Alt count proves to be the case Minor 3 ended at 13288 with Minor 4 underway OR ended @ 12710. Then again we could be in Minor 4 of Intermediate Wave i of Major wave 1. Just a thought for everyone to ponder.
    For others that enjoy drawing tools (ie wasting time) drop a Trend Line from Dec 5-7 area closing highs to the Mar 19 and Mar 26 tops. Apr 2 did not quite get up to the 1427 slope point but don’t split hairs, it might be a Wave B as noted on the INDU 60 min. Draw a 2nd parallel trend line that touches the Dec 29 & Mar 6 lows. Draw a 3rd parallel line that starts on Dec 19 low and the trend line touches the low end of the bars on Apr 10, 11, 16 & today. My main point is that IF the Market holds support & continues to advance from here, based on the trend lines, this “Wave 4” (of whatever degree) is the counter part to the Wave 2 in Dec 2011. Everything in between supported by the 2nd trend line is a Wave 3. If the 1363-1386 pivot cluster continues to support the 3rd trend line from the 1202 low then Wave 5 has begun. A break above the Wave 3 support “mid line“ would confirm and suggest a target of 1440 pivot with additional resistance at the upper “top” trend line. We also have a trend line from the Primary wave I lows reentering the picture.
    My second point for every one to ponder is that Major 1 of Primary I was a monster exceeding the total of Major 3 thru 5. If we are in Major 4 of Primary III, Major 5 would have to be a mega monster just for the entirety of Primary III NOT to be smaller than Major 1 of Primary I. Thus my suggestion that labeling Oct11 SPX 1293 as Int i and Nov11 SPX 1139 as Int ii. SPX 1267 in Dec11 would become Minor 1, SPX 1202 = Minor 2 and as mentioned SPX 1419 or 1422 completed Minor 3 with Minor 4 under way or completed at 1358. On the other hand if the market breaks down from here to the 1313 thru 1291 pivot cluster then at that size of Wave 4 is the counter part of the Oct-Nov 2011 Wave 2. That’s when I would say, “Never mind”. More later on my “I pay you to join” website. Cheers

  17. CB says:

    Thanks Tony.

  18. fishonhook says:

    Hi Tony
    Well we didn’t expect that! Any guess for where C will land?
    Thanks

  19. Lee says:

    Thanks Tony !

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