friday update

SHORT TERM: volatile friday ends higher, DOW +90

Overnight the Asian markets declined 1.0%. European markets opened lower but closed +0.7%. US index futures were higher overnight, and the market gapped up at the open to SPX 1407. The SPX had closed at 1399 yesterday. In the opening minutes the SPX rallied to 1411 and then began to pullback. At 9:45 the Chicago PMI was reported lower: 53.0 vs 53.7. Then at 10:00 Consumer sentiment was reported higher: 74.3 vs 73.6, and Factory orders rose: +2.8% vs -0.5%. Also at 10:00 the much awaited Jackson Hole speech: http://www.federalreserve.gov/newsevents/speech/bernanke20120831a.htm. The pullback continued after the speech, closing the upside gap at SPX 1399, and then the market started to rally again. At 11:00 the SPX hit a new high for the day at 1413 and another pullback followed. By 1:30 the SPX hit a higher low at 1403, then rallied again to end the week at 1407.

For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.65%. Bonds gained 20 ticks, Crude rose $1.75, Gold rallied $36, and the USD was lower. Medium term support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Last night the FED reported a rise in the M1 multiplier: 0.867 vs 0.851. Today the WLEI crossed into positive territory, (economy growing): 50.6% vs 49.9%.

The market gapped up at the open on overnight buying, hit SPX 1411, sold off to 1399, hit 1413 by 11:00, and then went into a trading range for the rest of the day. At the end of the day it appears Gold and Bond are traders were more convinced of an upcoming QE 3, (bernanke’s speech), than Equity and Currency traders. While the SPX had too rallies during the day, neither one of them cleared the recent SPX 1416 resistance level. So we end the week somewhat lower, bouncing in between the weekly range, heading into a three day weekend. We’ll take a closer look in the weekend update. Best to your holiday!     

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

Investor
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3 Responses to friday update

  1. alexh110 says:

    Possible negative divergence forming in Gold here: still think it could sell off into a right shoulder.

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  2. CB says:

    thanks Tony!
    Barry Ritholz had some technical stuff on his site yesterday (weekly MACD), in case you guys haven’t seen it and would like some (more) reading material for the long weekend 😀 Happy weekend everyone!
    http://www.ritholtz.com/blog/2012/08/cycle-tops-macd-indicator/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

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    • tony caldaro says:

      thanks CB,
      Notice the 1929 bear market hit -27%.
      The Cycle [2] low was -13%, and Cycle [4] -12%.
      The 1929 level was not approached again until the 2007 bear market -16%.
      Fits the very long term wave count

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