thursday update

SHORT TERM: correction continues, DOW -121

Overnight the Asian markets dropped 1.4%. Europe opened higher, but lost 0.3%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported improving: 355K vs 363K, and the Trade deficit declined: -$41.5 bln vs -$44.2 bln. The market opened unchanged at SPX 1395, and rallied to 1401 in the opening minutes. Then, just as suddenly it started to pullback. The pullback continued into the afternoon, without hardly a 4 point bounce, and hit SPX 1381 by 1:30. Then with a positive short term divergence in place the market tried to rally. At 2:00 the SPX hit 1388, but then began to pullback again. Heading into the close the SPX dropped below 1381, and closed at 1377.

For the day the SPX/DOW were -1.10%, and the NDX/NAZ were -1.50%. Bonds gained 12 ticks, Crude added 55 cents, Gold rallied $14, and the USD was flat. Medium term support drops at the 1372 and 1363 pivots, with resistance now at the 1386 and 1440 pivots. Tomorrow: Export/Import prices at 8:30, then Consumer sentiment and Wholesale inventories around 10:00.

The market opened flat today, rallied to within 2 points of yesterday’s rebound high at SPX 1403, then rolled over and took out yesterday’s low at SPX 1388. At 1:30 the hit SPX 1381, within the OEW 1386 pivot range, and the market displayed a short term positive divergence. The market did rally to SPX 1388, but again headed lower breaking through the OEW 1386 pivot range at the close. This downtrend has now covered nearly 100 SPX points. The typical downtrend, for this degree of wave, is about 100 SPX points.

Short term support is now at the 1372 and 1363 pivots, with resistance at the 1386 and SPX 1396/98. Short term momentum is nearing extremely oversold. The short term OEW charts remain negative with the swing level now around SPX 1411. Best to your trading!

MEDIUM TERM: downtrend continues

LONG TERM: bull market


About tony caldaro

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33 Responses to thursday update

  1. ronini3 says:

    Tony, I am sorry!

  2. bob623 says:

    What do you think the possibility of the SPX reaching the 1363-1345 support level in the short term within a week? Thanks!

  3. pbnj123 says:

    Tony – would the high today be a i then we (hopefully) just had a ii and now (again hopefully) should be starting a iii of a potential 1 up?

  4. Tony, when will this correction be officially over? Any levels?

  5. magnus1234 says:

    Tony, I have not looked for a couple of days…but did you just put in that int ii (green)?

  6. pbnj123 says:

    I sure wish copper would perk up – even a little today

  7. pbnj123 says:

    It will be interesting if the same pattern emerged as the last lows for Major 2 played out – currently looks the same although at a lesser degree with price action and divergences – but still interesting.

    • Ryan Parker says:

      Was noticing that PBNJ. They look very similar although I would point out that the 1267 low came on a Monday. Solid lows rarely come on Fridays.

      • pbnj123 says:

        Good morning Ryan – I did not look at that but good to know – heck there’s a Monday a couple days from now 😉

  8. Ryan Parker says:

    Today may be a bottom of some degree. Tech is actually showing some strength for the first time in a while. 1388 and 1403 are key resistance for the SPX.
    A= 1433-1388= 45
    B= 1388-1403= 15
    C= .618 x A @ 1375

  9. alexh110 says:

    Tony I did the calculation on the 30YR bond. I expect it to bottom at around 1.4% yield.

  10. valunvstr says:

    Bullish divergences on RSI8, CCI, Stock and Cha Money Flow Oscillator. Maybe a little bit lower but with bullish divergences and the 200 day SMA, I’d start buying. This is a no brainer here. This is the same set up at the 1266 buy.

  11. M1 says:

    Thanks, Tony.
    I like more than yesterday your worse case scenario support at 1345/46. However, an important weekly support was broken today. This may suggest: a reverse soon or a selloff more deeper than expected. I am still checking. I will try to post some chart later or tomorrow.
    Have a nice evening.

  12. blubrd67 says:

    Great article on various options how to rescue Greece.
    They obviously don’t want to let Euro fall apart, it’s just the question how to proceed, which will take a few days/weeks to sort out.

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