tuesday update

SHORT TERM: market pullback continues, DOW -101

Overnight the Asian markets gained 0.1%. European markets opened higher and gained 0.4%. US index futures were higher overnight, and at 9:00 Case-Shiller housing prices were reported higher: +1.2% vs +0.5%. The market opened higher at SPX 1461, then dipped to 1459 by 10:00. At ten Consumer confidence was reported higher: 70.3 vs 60.6, and the FHFA housing index gained again: +0.2% vs +0.7%. The market then rallied to its high for the day at SPX 1463 and began to pullback. The pullback continued throughout the afternoon and right into the close. The SPX ended the day at 1442.

For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.35%. Bonds gained 10 ticks, Crude slid 85 cents, Gold slipped $3, and the USD was flat. Medium term support remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: New home sales at 10:00.

The market opened higher today, hit resistance at SPX 1463, and then began to pullback. Around 3:00 the SPX broke through the temporary support at 1450/52, continued lower, and hit the 1440 pivot range by the close. That potential triangle scenario, noted yesterday, no longer looks to be in play.

Another look at the short term charts displays a three wave decline to SPX 1450, a rally to 1467, then another three wave decline to 1442. Both declines are exactly 25 points, for a total Intermediate wave iv decline of 33 points. The daily RSI ended slightly oversold today too. This pullback now meets our original minimum projections of a 30+ point pullback, and an oversold daily RSI. Should the OEW 1440 pivot range hold, (SPX 1433-1447), the bottom may be in for Int. wave iv.

Short term support is at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum ended the day quite oversold. The short term OEW charts now have a negative bias from SPX 1455. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

Investor
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73 Responses to tuesday update

  1. wcagle says:

    Tony,

    Do you see the market rebounding from here for end of month/quarter window dressing?

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  2. M1 says:

    Tony, this doesn’t look like the wave ii on the SOX. Any adjust in progress ?

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  3. cruda Lee says:

    This is a great opportunity
    DONT OVER THINK !
    The bots just kicked the bums out 🙂

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    • cruda Lee says:

      Especially GC !

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    • rc1269 says:

      Lee we don’t usually get such unreserved, non-cryptic opinions from you – I like it! thx my man

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      • cruda Lee says:

        Hey R C
        Did we quit when the Germans bombed Pearl Harbor ? I didn’t think so
        I’m just fired up with the volatilty.
        If folks who position trade liked the markets 2 weeks ago they have to love them here or about about 1-2% lower right ? ES GC CL
        I’m wrong as much or more than the next feller but if u get ur price thats.618 of the battle
        Remember I’m a hack day trader

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      • cruda Lee says:

        Hey RC

        I also think Tony’s 60 min SPX chart and count is a MUST watch

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      • cruda Lee says:

        BTW a correction 9/13 was the QE3 infinity ..the year high was 9/14
        this week weve been getting momentum around 12:00 pm CT
        Trade well !

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    • mm4398 says:

      Lee,

      What do you think of wheat here?

      Looks like its built a nice base the last two months and the December contract is sitting on the 13 weekly EMA.

      Any big events in the grain markets coming up that I’m missing here?

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      • cruda Lee says:

        Hey mm4398

        I personally have not been trading ZW at all but I have been trading ZC and I got stopped out on a long position early this am that I’ve had on for a week so… 🙂
        I follow this gentleman on Twitter https://twitter.com/ArlanFF101 and he and his stream of farmers and grain traders do a really good job with announcing the events big and small with wheat. It sure does look like a good base ..I saw this chart posted today and it looks tricky enough to perhaps play out. http://twitpic.com/ay7hdq/full.
        I’m bullish LT to a fault

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  4. cruda Lee says:

    I hate the word line in the sand but 1427.50 ESZ is where guys are buying against this morning

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      • cruda Lee says:

        U bet Tony
        A little volatility and liquidity is a good thing IMO

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      • cruda Lee says:

        WASHINGTON (MarketWatch) — Sales of newly built homes in the U.S. fell slightly in August as prices rose a record 11.2%, but demand remained at a two-year high.

        Too much good news 🙂 I’m sure it’ll be revised and I would guess it’s higher end stuff but who knows

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    • cruda Lee says:

      thar she blows CL ..all sell stops
      ESZ the same…
      the book has been wiped clean
      Its a new day trade well !

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    • cruda Lee says:

      rising prices on lower volume with stocks no problem with housing potential problem.
      XHB these guys made a killing this year… Cramer walked away from housing last year and missed the whole move..In his charitable trust of course . Retail has the baton now IMO

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  5. cruda Lee says:

    Everything is in black and white now as far as the 60 min SPX goes.
    If possible remember to hug ur mother n law at least once this year

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  6. piazzi says:

    There is an amazing thing about cycles

    not that they happen and find their rhythm and give one a great tool to assess some probability. Yes, they are all true but I find them common place and not at all amazing

    What is, to me amazing about cycles, is how emotions get better of most going into a cyclical low or cyclical high

    we expressed probability of market sputtering in September and moving into an intermediate as well as a trading cycle low into October

    how many stay objective enough to assess probability of a long entry (and associated risk if one is wrong) with regards to support levels?

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  7. rc1269 says:

    Some thoughts on Spain, for those interested:

    Moody’s is slated to conclude their review by the end of this month. Spain is rated Baa3 and there’s a good chance they will be downgraded to junk. A move to junk rating would force Spanish banks who have pledged Spanish gov’t bonds as collateral for ECB repo to replace them. Given the scale, this would be pretty much impossible. The ECB has stated they will waive the investment grade rating requirement on collateral if the country in question has joined the ESM program. In short, if we see a downgrade to junk by Moody’s it nearly guarantees that Spain will request aid and join the program. Not doing so would leave the Spanish banking system in an untenable situation. cheers, -rc

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  8. rc1269 says:

    Tony, on Crude are you still looking for it to start a new up-wave here/soon? I apologize if this was something you covered the last two days. I’m afraid the count on your charts isn’t very clear to me, with all the a’s and b’s. I recall last week you had said something to the effect of “it better bounce soon,” which of course it hasn’t. thanks again!

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  9. Tony, just so as I understand it right, you are looking for major wave III to conclude by year end and nor the primary III. Or Intermediate V will last into the year end.

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