wednesday update

SHORT TERM: rally continues, DOW +89

Last night AAPL reported better than expected earnings. This pushed NQ (NDX futures) higher, which pulled up everything else with it. Overnight Asian markets were mostly lower but closed +0.2%. European markets opened higher and gained 1.3%, for the second straight day of good gains. US index futures were much higher overnight as well. At 8:30 durable goods orders were reported lower: -4.2% vs +2.4%. The market gapped up the open to SPX 1383, jumping over the 1372 pivot, and continued to rally. The SPX had closed at 1372 yesterday. By 10:00 the SPX hit 1391, neared extremely overbought, and began to pullback. At 12:30 the FED issued its FOMC statement:, the market hit SPX 1385 and tried to rally. By 1:00 the SPX hit 1390, then pulled back to 1385 again by 2:00. At 2:00 the FED released the following: The market then rallied to SPX 1391 again, stayed within a narrow range, and closed there.

For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +2.50%. Bonds lost 4 ticks, Crude added 55 cents, Gold rose $3.00, and the USD was lower. Support for the SPX jumps to the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum neared extremely overbought and ended with a slight negative divergence. Last night the FED reported New home prices rose dramatically: $291.2K vs $269.7K. Tomorrow at 8:30 weekly Jobless claims, then at 10:00 Pending home sales.

Today’s gap up opening pushed the SPX past 1387, a level we noted yesterday, and it hit 1391 in the first half hour of trading. This sharp rally from monday’s SPX 1359 low cleared out the Intermediate wave B count at SPX 1393. It now appears Int. B is still underway. There are two ways of counting this pattern. First, which we noted quite early on the blog this morning, an expanding abcde triangle. The touch points of the triangle would be: 1388, 1365, 1393, 1359 and the current rally. This would suggest a potential high again at SPX 1398. The second an inverted abc flat. The touch points here: 1393, 1359 and the current rally. This would suggest a potential high right around SPX 1393. There are other options open as well. But these two appear to be the most obvious at the moment.

Short term support is now at the two OEW pivots 1386 then 1372. Short term resistance is at SPX 1393, then around 1398-1402. Short term momentum displays a slight negative divergence. Best to your trading!

MEDIUM TERM: DOW in confirmed downtrend, SPX likely to follow

LONG TERM: bull market


About tony caldaro

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82 Responses to wednesday update

  1. waiting for a pullback to add more longs. it is important to try to be fully invested during most of the balance of the year until a long term sell signal is given. all long term momentum and monetary indicators remain positive.

    added eqix at 164.15 to high risk portfolio.


  2. cwallace90 says:

    Don’t know if anyone noticed but the Transports are lagging badly today…down over 1% while the DOW is up=non-confirmation.


  3. mike7x says:

    Hi Tony, I love and appreciate your updates and have for some time now. I think you have been spot on since I have been following you (which began sometime last year). The market seems to be sending more confusing signals than normal (haha, what’s normal?). There also seems to be a lot of diverse opinions here today. Maybe we are at a very important inflection point here. I look forward to tonight’s update, as always, to see if this is all sorted out (or not). Thanks for all your work!!! 🙂


  4. M1 says:

    dow: so it looks this was wave 3 ….expecting wave 4 down…(I was correct after all, major 4 was in place at 12710 !!)
    12710 – 13131 … wave 1
    13131 – 12845 ..wave 2
    12845 – ……. wave 3


  5. pugsma says:

    In response to jaja2121 below: Yes, there all bullish counts to be aware off. Here is my primary count posted for my subscribers Monday April 23rd EOD.

    Protected: April 23rd, 2012: Update 2 – EOD

    Posted by pugsma on April 23, 2012

    5:30 pm EST: There is a 1-week long positive divergence on the $NYMO with respect to the SPX price. I’m expecting the SPX to move up 30 to 40 points over the next several days per the primary count. Also, the 60-min MACD is near a bull-cross with positive divergence.

    The primary count is that this drop to 1359.79 is part of the minor E of major [4]-P1-C3 wave. Remaining above the minor C wave low of 1357.38 is not a requirement, as the minor E wave must only old above the Minor A wave low of 1340.03. However, in order for this primary count to have the “right look” a hold of this 1363 pivot area (i.e. 1363-7 = 1356) is important. The close today above the 1363 pivot is bullish. I have today’s first move to 1366 as wave (1) of minor 1 of major [5]-P1 and the correction to 1361 as wave (2). Next I’m expecting a wave (3) move up to 1390, where (3)=4.22*(1). The target area for minor 1 is 1393 to 1402. And the minimum triangle target for major [5]-P1-C3 is now at 1441 (1359 + 82) with the maximum still at 1504 (1422 + 82).


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