tuesday update

SHORT TERM: consolidation day, DOW -7

Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.5%. US index futures were relatively flat overnight, and at 8:30 Housing started were reported higher: 894K vs 872K, but Building permits were lower: 866K vs 894K. The market opened lower at SPX 1384 and pulled back to 1381 in the first few minutes. The SPX had closed at 1387 yesterday. After the pullback the market rose to a new rally high at SPX 1390 by noon. Then right after that high FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm, and the FED released: http://www.federalreserve.gov/newsevents/press/bcreg/20121120a.htm. The market continued to pullback, and by 1:30 hit SPX 1377. Then it reversed and rallied to SPX 1388 by the close.

For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds lost 12 ticks, Crude dropped $2.20, Gold slipped $4, and the USD was slightly lower. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: weekly Jobless claims at 8:30, then Consumer sentiment and Leading indicators at 10:00.

The market opened slightly lower today, had its first five point pullback since SPX 1351, then rose to a new rally high at 1390. At the high the market was quite-extremely overbought, and then it had its first significant pullback from SPX 1351. The rally from friday’s SPX 1343 low has thus far unfolded impulsively: 1361-1351-1390-1377(?). If the market hits SPX 1390 again, or higher, we will have had five waves up from the low.

Short term support remains at the 1386 and 1372 pivots, with resistance at SPX 1396/98 and 1402/03. Short term momentum dropped to neutral after hitting extremely overbought, then ended the day rising. The short term OEW charts remain positive with the swing point now around 1379. Best to your trading!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bull market

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

About tony caldaro

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68 Responses to tuesday update

  1. torehund says:

    Tony this is looking awfully good, one in here coined 1405, nice !
    Nikkei going strong alleviating my bear flag fears, by a lot. Are we safe until a 10 000 test on Nikkei ?

  2. Mladen Jelic says:

    We are going to SPX 1400 and then who knows, depend on many things. 🙂

  3. vishal409 says:

    Lee has your system generated a sell signal Yet?

  4. LX says:

    whats happening fellers ?
    I3 has a winner winner chicken dinner going in ZC I see 🙂

  5. pbnj123 says:

    Good morning Tony
    If this is an impulsive wave structure up to new highs and we have 5 waves up to “potentially” have completed i up – then would it not be that ii’s in impulsive wave up would be shallow and not allow those waiting for steeper pull backs in order to get in?
    Thank you

  6. CB says:

    Maybe I am looking at it wrong – seems to me we only have 4 waves so far .. ??? http://screencast.com/t/ZxP6hzmD1j

  7. kvilia says:

    Went short again in anticipation of retesting the lows. Happy Thanksgiving Tony and all!

  8. budfox9450 says:

    ref CAF – the Shanghai Index, is now Bullish, for Short term trend, and trade….Bud

  9. Hi tony,

    It was way back in September that i posted my view on s&P, back then i was expecting s&p to top around 1455 levels and fall, But it went a bit more than that, but outcome was the same. Now after the fall, this is what i expect for next few days http://niftyewa.in/pre/?p=372.



  10. pas1968 says:


    Shanghai might have put in the ‘5’ today?

    What price action would you need to now see to confirm the ‘5’ is in?

    (when shanghai dipped below 2000 during today I noted on Bloomberg some came out saying it was broken and now heading to 1700 then 1500 where they would buy)


  11. ronini3 says:

    Short ZC @ 742.5. 747.5 stop OCO 725 limit.

  12. Ryan Parker says:

    Canada looking weak. Venture in particular but the TSX also failed recently near key resistance. Not necessarily good for the commodity/reflation trade.

  13. valunvstr says:

    oye vey, I totally disagree. When the market gets as overbought as spx did (UTL 25) it is rare for the market not to make a lower low after a bounce. The same as very overbought condition as TLT (ULT 77). TLT has a gap to close in the low 123’s and it is well on its way. Expect the gap fill to coincide with a top in SPX before a lower low is made. How low? Don’t know…maybe 1320’s but it will be enough of a pullback from the 1390-1410 area that I will be happy to step aside.

    • torehund says:

      Seeing the possibility of a rise in a stepwise fashion with large retrace and nearly flat consolidations of gains, RSI and other indicators means very little and however overbought it may be it still rises. Of course these lifts are scary to participate in and thats why they have legs. I bought into several individual stocks that were dirt cheap a couple of months ago, and now no-one cares to even discuss them, thats a sign of heavy gains coming.

      • torehund says:

        Ok Anybody crazy enough to buy into them, I give them to you in increasing order of risk, DNDN, PSDV, ARWR, CYCC, URRE, FREE, NEWL.

  14. M1 says:

    Thanks, Tony.
    I am still 150% short, but I agree with you. The downtrend may have bottomed. New all time highs may be next. (Dow over 20,000).
    Placed stops today and I may go 150% long tomorrow.
    P.S: http://www.distressedvolatility.com/2012/11/robert-prechter-is-few-years-less.html

  15. TommyB says:

    Have a great one guys! We do have a lot to be thankful for!!!

  16. CB says:

    Thanks so much, Tony, for this great site & thanks everyone for sharing your thoughts! Have a wonderful Thanksgiving everyone!

    • tony caldaro says:

      And you too CB … everyone makes this site ehat it is today.

      • CB says:

        Thanks Tony!
        “everyone makes this site what it is today”.. well put Tony! With ur unique approach, you’re a magnet for trading talent. And in addition to many excellent technicians, we’re very fortunate 2 be able learn from our top-notch trading coaches like Lee and HD as well. Thanks guys! when the going gets tough, you get going & keep us on track 🙂
        sorry, was too distracted today w/other things…a few # to consider next :
        rsi (14) @50 =1401ish
        38.2 retr. from 1435=1400.27 and 38.2 % from 1343 =1393.45
        1408..93 =50% 1343-1474 and 1424=38% from 1474 high

      • tony caldaro says:

        Happy T-Day to you and TC

      • CB says:

        Thanks for the kind word, and same to you & our family, Tony! Think that all that tryptophan & football makes a lot of sense… should make time pass faster 😆

      • CB says:

        geez, not 1, but 2 typos?… 😳 meant: thanks for the kind words and same to you and your family, Tony!

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