holiday update

SHORT TERM: US markets closed, DOW (YM) +34

Overnight the Asian markets gained 0.9%. Europe opened higher and gained 0.7%. US index futures were traded while the foreign markets were open. At the end of the session the SPX (ES) was +3.25, and the NDX (NQ) was +4.00. Bonds rose 1 tick, Crude lost 30 cents, Gold added $3, and the USD was lower. US cash markets reopen on friday for an abbreviated session.

Perusing the charts. The SPX has declined from 1475/71 to 1343 during Sept/Oct to Nov. At the recent low the correction was 8.9%, retraced 61.8% of the previous uptrend, and Minor C was 2.618 Minor A. During the entire decline the maximum rallies were 40 points, (Minor B), and 38 points, (Minute B), respectively. This fits within the parameters for the typical wave 2 corrections during this bull market.

Since that 1343 low the SPX has rallied 48 points, the biggest rally since Sept, in what appears to be a five wave structure. Also, this initial rally may not be over yet, since the SPX closed at the high of the 1343-1391 rally on wednesday. These positive developments suggest we should now be in a new uptrend. Should this indeed be the situation the most important upcoming resistance levels are the OEW 1440 pivot range and SPX 1463/64. An uptrend failure within this range would suggest we are in a bear market. An uptrend to new highs would suggest the bull market, as projected, continues. The bull/bear inflection point continues. Happy Thanksgiving!

MEDIUM TERM: downtrend may have bottomed

LONG TERM: bull market


About tony caldaro

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24 Responses to holiday update

  1. piazzi says:

    we had been expecting (and repeatedly mentioning) a projected intermediate low for S&P into November

    the first potential low candidate did not hold and caused a small loss

    the second potential low candidate came late in the timing band for the intermediate low with nicely oversold conditions and massive dumping breadth and it had been nicely lucrative trade so far

    cycles are simple and elegant — combined with proper money management and risk mitigation measures, they can be powerful weapon freeing a player from all the blah-blah crapoola noise out there — identify of a potential low, decide on an exit strategy, make a bet and go — if stopped, wait bfor next potential low, if not, monitor and adjust exit strategy

    If Nov 16 was indeed intermediate low, next intermediate low will theoretically be due in April-May time frame

    If Nov 16 was not intermediate low, the trade wil exit with very nice profit and we’ll await the next potential low


  2. waverookie says:

    In the words of HD, “USA”!!!


  3. LX says:

    Looks like 5 waves up from SPX 1343 is in the process of completing today.
    Just an observation
    Ahhh the holidays


  4. torehund says:

    Tony, I play the 3-6 mnths durations in small caps individual stocks, and just have to be observant of the general market direction. And as you say this uptrend is very very vital for either confirming the bull, or killing it..As the bull can only be killed once and the bear stinged to oblivion, we are still hopeful that horns are working. As to your alternative count goes, you stick to 5 wave structures and have a unusually small 3 rd wave and also 4th wave overlaps the first (and it isnt impossible in EW) but looks unusual , have you considered to label an alternative count on larger ABCs ? If I was to do so I would see a new all time high on SPY as a complete double ABC ! Thanks in advance.


    • torehund says:

      Specifically, double ABC reversed with an extra topping from the bottom i 09. As ABCs very often end with a bounce and a lower low…If we see the index from bottom 09, upside down, EW dont care about upside downs and rotated waves, lol !


    • tony caldaro says:

      Yes that diagonal would be better labeled as an ABCDE.
      Correct there is another alternate count.
      But let’s not make it too confusing.


      • torehund says:

        Yes, we will soon enough be faced with the dilemmas of counts if markets ascend where we expect them to go. In EW markets always go to the next crossroad where doubt and fear will forever re-emerge.


  5. robslob64 says:

    Interesting commentary Tony and as always Thank You for it!

    I haven’t heard you speak much about the continuation of the commodities (gold) bull market going through 2014 lately…does that change if we fail to make a new high in the S&P on this next upswing?


  6. pas1968 says:

    Does anyone have market stats (ave gain/loss) for first year of a new presidential term?


  7. Happy Thanksgiving Tony. Interesting that you mention bear market if previous highs are not overtaken. Seems in that case this rally will prove to be just a retracement of the initial decline. So you are saying that any failure now and you would not give the benefit of doubt to the bull market continuing. Right?


    • tony caldaro says:
      If this upcoming uptrend fails to make new highs we are very likely in a new bear market. If it makes new highs the bull market resumes with the preferred count.


    • The Homeless Daytrader says:

      I would supose we might want to be careful not to confuse “this rally” with an “uptrend.” If the next uptrend fails to produce a higher high, then odds favor a bear market. “This rally,” however, is still just a bounce without having confirmed a new uptrend. Until a new uptrend is confirmed (which is likely not very far away) then “this rally”could end right here, and new lows could be seen without jeopardizing the bull market scenario. Am I reading you correctly, Tony?


  8. ko68 says:

    Thanks Tony, happy Thanksgiving!


  9. CB says:

    Igor, thanks! Great read. Really appreciate all you’ve done for us over the years along with all our friends here, especially Lee, HD and I3 to get us both informed, thinking, inspired & laughing. Congrats on finishing the next level of your TA education – great effort, Igor! (now I can ask even more really stupid questions that you’ll need to answer.. :)) Thank you Tony for the special holiday update & all your tireless efforts to share your wisdom w/us. Happy T-day everyone!


    • Igor says:

      Thank you CB.
      “now I can ask even more questions that you’ll need to answer.. ” Anytime.


      • CB says:

        thanks Igor. I know we can always count on you . And maybe I shouldn’t have said that you need to, cuz you obvioulsy don’t, but I am sure you will always help us out with your advice just out of the goodness of your heart & because you like to analzye things very thorougly.


  10. Igor says:

    Happy Thanksgiving Tony and all my old and new friends!
    Some pearls of wisdom from Joshua Brown:


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