monday update

SHORT TERM: market gaps up and keeps going, DOW +208

Overnight the Asian markets gained 0.6%. Europe opened lower, but gained 1.3%. US index futures were higher overnight, and the market gapped up at the open to SPX 1370. The SPX had closed at 1360 on friday. The rally continued to SPX 1382 by 10:00. Then the NAHB was reported at a six year high: 46 vs 41, and Existing home sales were reported higher: 4.79 mln, vs 4.75 mln. The market quickly pulled back to SPX 1378, then resumed its rally. At 12:30 the SPX hit 1383, pulled back to 1380 by 1:30, then turned higher again. Notice all these pullbacks are smaller than five points. Heading into the close the SPX hit 1387 and closed there. Guess traders reached the fiscal cliff and found a hand glider.

For the day the SPX/DOW were +1.80%, and the NDX/NAZ were +2.30%. Bonds lost 10 ticks, Crude gained $2.25, Gold rallied $19, and the USD was lower. Medium term support jumps to the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: Housing starts and Building permits at 8:30, then a speech from FED chairman Bernanke around 12:15.

The market gapped up today, over the OEW 1363 pivot, rallied past the OEW 1372 pivot, and then ran into resistance at the OEW 1386 pivot. Then it cleared the 1386 pivot at the close. The gap up today was the first one that was not immediately sold off since October 16th – during the Minor B wave rally to SPX 1464. Counting from the uptrend price high, SPX 1475, the two biggest rallies have been 40 points and 38 points: 1431-1471 (when the DOW topped) and 1426-1464 Minor wave B. At today’s high, SPX 1387, the market has now rallied 44 points from friday’s 1343 low. This is the best rally since the uptrend high.

Short term support jumps to the 1386 and 1372 pivots, with resistance at SPX 1396/98 and 1402/03. Short term momentum hit extremely overbought today, after friday’s positive divergence. The short term OEW charts turned positive in the first half hour of trading, with the swing level now around SPX 1377. The next important objective, as noted in the weekend update, is for the SPX to clear 1400. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bull market


About tony caldaro

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67 Responses to monday update

  1. LX says:

    Deal or no deal ?
    The folks at CNBC are flopping like fish…latest ….no deal blah blah

  2. LX says:

    Happy Thanksgiving everyone !
    Im trading rest of the day then tomorrow am then thats it for the week.
    We used to slow down a bit into turkey day but last few years not so much.
    watching the same ole #’s as everyone else :0

  3. fionamargaret says:


    Thanks Change in Trend.

    Thanks Tony.
    A Great Thanksgiving to All.

  4. pbnj123 says:

    Happy Thanksgivings to all present today – the crew here is the best and Tony – ah a fine captin be he 😉
    Cheers all around

  5. LX says:

    .618 back on the days range here @ 1382.25 if it holds it should make go south for a bit..if not inverted perverted gangham style

  6. Ryan Parker says:

    If the market has bottomed here, what sectors are going to lead the market higher? Upon further examination of market internals yesterday ORCL, MSFT, INTC, KLAC, and QCOM were essentially unchanged on a day that the Naz 100 was up 2.4%. CSCO and AMZN also under-performed the 100. The whole rally in tech yesterday was AAPL and GOOG.

    The economically sensitive sectors like tech, semis, Transports, and energy really aren’t looking good here. It would seem that if these sectors (semis, energy, and Transports peaked in Q1/Q2 2011 along with most of the global markets) don’t get rolling soon (in the next week) it is going to be tough to see how this market moves higher.

    I’m open to potential outcomes for the market here. I can make a hell of a bear case but I can make a bull case as well. #1 case for a massive bull market here is that nobody wants ANYTHING to do with the stock market. Sentiment seems incredibly bearish based on my observations. Then we have the observation of max pain. What move would inflict the most amount of pain upon market participants? I would argue either a massive rally on the upside or continued choppy action.

  7. H D says:

    Happy Thanksgiving Tony and All! So much to be thankful for. I will see ya’s next week.

  8. LX says:

    theres always the gap from Friday
    GL guys !

  9. H D says:

    1372 pivot = .382 back

  10. LX says:

    Thanks Tony !
    Da Bears

  11. H D says:

    From 1379.xx we have 5 waves 1392.xx w some symmetry

  12. saf18hornet says:

    How did AAPL jump over 600 like that? signs of things to come…..??

  13. torehund says:

    Dendreon, DNDN has from 2010 made 2 large descending ABCs. Now it made small ABCS X 2 in the last month(S) upwards, with lesser retracements of the advances. I think its ripe for a breakout to the upside. During the entire upturn, before the recent general market correction this stock has been sold off. Just a tip from me ?

  14. M1 says:

    Good morning,
    Not much. I will stay short today and place stops after the close.

  15. deltastrikejj says:

    its not often bears get bailed out in a bull market but here is some evidence..

  16. fionamargaret says:

    Tony, I did laugh at your comment this morning ” short term charts turned positive this AM for the first time since 1416″ – it certainly seemed that long to me!

    You also mentioned the seemingly inverse behaviour of AAPL and FB.
    Now why did I buy FB thinking everybody was so gloomy that a rally might be in the cards.
    Mr Zuckerberg, please buy some shares. (maybe a gazillion’s worth).

    Talking about buying shares RIMM needs to go back to $90 (and then we could really celebrate animal spirits – of course we would then be inviting a spectre of A.G. to appear

    Thanks Tony for all your great analysis.
    You really should have done more than 3000 since 1416

  17. valunvstr says:

    TLT needs to fill a gap at 123. The 50 day sma is also at 123. TLT came from very overbought readings (ULT oscillator at 77+) while the SPX came off major oversold conditions (ULT oscillator at 25). The combination would suggest a push higher by equities with a gap fill down to around 123.25ish for TLT. From there, a higher high on TLT and a lower low on SPX would set up the bullish and bearish divergences for the markets next moves. TLT ultimately down (after a gap fill and a higher high) and SPX ultimately higher (after a rally to the 1390-1410 and a lower low beneath 1343).

  18. pbnj123 says:

    Tony – would you be looking for the 1400 mark to be considered an area for i of iii of 3 to complete then to be followed by a pull back of at least 32% to possibly 50% of i before we really kick off the 3’s up?
    I know it’s early but nice to have targets 😉 .
    Thank you

  19. M1 says:

    Thanks, Tony.
    Not so sure what this rally means, but I followed my plan and I reloaded my short positions at the close. So I am 150% short once again.(From 75%)
    Good luck to all.

  20. The Homeless Daytrader says:

    Thanks Tony – Traders not only found a hang glider … they caught a monster thermal as well!
    Closed my short crude today as well as my short gold, and got long stocks. I’m a fickle guy, so I may be short again tomorrow, but right now, it looks like it is either be long or be wrong. I suppose Ben’s $40 Bill/month is getting ready to purchase new bull market highs. I think odds of new highs increase dramatically if the Dow gets and above 13040 and sticks.

    Thanks again, and nice call on Friday, Sir Lee!

  21. LX says:

    Thanks Tony

    Use stops 🙂

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