wednesday update

SHORT TERM: volatile FOMC day after QE3+, DOW -3

Overnight the Asian markets gained 0.4%. Europe opened higher and gained 0.4% as well. US index futures were higher overnight, and at 8:30 both Export (-0.7% vs +0.2%)/Import (-0.2% vs +0.3%) prices were reported negative. The market opened higher at SPX 1432, moved to 1433 by 10:00, and then pulled back to 1429 by 10:30. Ahead of the FOMC statement:, the market drifted higher until the statement was released at 12:30. Initially, after the report, the market rallied to SPX 1434, then dropped to 1429 before rallying again. Around 1:30 the SPX hit a new uptrend high at 1439, set up a negative divergence, and started to pullback. At 2:00 the Budget deficit widened: -$172.1 bln vs -$137.3 bln, and the FED released: The pullback continued through FED chairman Bernake’s press conference. Around 3:30 the SPX hit 1427, then bounced to close at 1428.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.30%. Bonds lost 14 ticks, Crude gained $1.00, Gold added $1, and the USD was lower. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: weekly Jobless claims, Retail sales and the PPI all at 8:30. Then Business inventories at 10:00.

The FED officially bumped QE 3 to $85 bln/month. The market rallied a bit, to make a new uptrend high, but then sold off in a volatile FOMC day. If you recall the market was not too impressed with QE 3 when it was first announced on September 13th. Then the SPX rallied for one day, hit 1475, went sideways for a month, then entered the downtrend to 1343. Today the FED effectively doubled QE 3 and the market closed flat.

The bullish perspective suggests Minor wave 3 is still underway, and this recent five wave rally from SPX 1398 ended Minute wave i at SPX 1439. Minute wave ii could now pullback to possibly the SPX 1413/1416 short term support area, if the 1422/27 area is exceeded. The bearish perspective also allows for a pullback into the same support areas, as wave 2 of C unfolds. However, if SPX 1398 is broken to the downside, at any time, the probabilites greatly increase for the alternate bear market scenario. The market has set its parameters.

Short term support remains at SPX 1422/27 and 1413/16, with resistance still at the 1440 pivot and SPX 1463/64. Short term momentum made a negative divergence at today’s high and ended the day below neutral. The short term OEW charts remain positive with the swing level now around SPX 1419. With the market hitting the bull/bear inflection range: SPX 1434-1462, how it deals with this is quite important heading into 2013. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull/bear inflection range hit


About tony caldaro

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90 Responses to wednesday update

  1. ronini3 says:

    my 16/total 86=18.6%

  2. LX says:

    Hey..u guys have a good day 🙂 Somebody wants to get short or cover longs into the close eh ? Sum selling at the .382 back pit

  3. fibretrace1618 says:

    That 23.6% @ 1416.11 is holding strong.

  4. fibretrace1618 says:

    Okay, next primary target is going to be the 138.2% retrace of the 6/04/2012 Low (1266.74) & the 9/14/2012 High (1474.51) @ “1187.37”, corresponding with the 38.2% retrace of the 5/02/2011 High (1370.58) and the 10/03/2011 Low (1074.77) @ “1187.77”, in addition to the 50% retrace of the 6/28/2010 Low (1010.91) and the 5/02/2011 High (1370.58) @ “1190.75”. Some serious confluence going on there. Bounces on the way at 1370.63, 1343.35, and 1266.74. In my impaired and humble opinion.

    • CB says:

      nice ..Ur in the zone, Fib….wish you luck…your life depends on it…don’t screw up & thanks for the numbers

    • fibretrace1618 says:

      Add one more to seal the deal with the 261.8% retrace of the 11/16/2012 low @ (1343.59) and yesterday’s high @ (1438.59) putting you at “1189.25”.

      • CB says:

        sure…why not…nothing succeeds like excess..we are talking in the next two weeks? P:

      • fibretrace1618 says:

        Not if you’re buying March and June 2013 SPX Puts my friend .

      • CB says:

        OK, thx for the advice, Fib & hey I’m not ur friend, but you were being offensive toward my good friends here & we need to make sure it’s not gonna happen again. You need to take care of whatever issues cause you to behave like this…If you need help, get help..cuz it’s unfair to bring ur personal issues here like this- you are not gonna resolve them this way, anyway. If you can try to share ur knowledge with us in a way that is respectful, you’ll get respect back. Being arrogant will get you nowhere. GL. You’ll be fine if you just try.

        Thanks Tony!

  5. waverookie says:

    So are we calling the Fed’s latest move QE3+ or QE4? I’ve read a few headlines calling this latest move QE4.

  6. rc1269 says:

    1417/ must be about time for a short term bounce

    • ronini3 says:

      No worries..It is safe for the office!

      • CB says:

        nice ..we’re not in Kansas anymore…in more ways than one, I guess…but I am reading you kinda like it :p

      • CB says:

        Hey, cheer up I3. good chart! see if you can squeeze into it this quote from David Lee Roth for some more color ” I used to have a drug problem, but now I can afford them” -then it’ definitely won’t be safe for the office 😉

    • fibretrace1618 says:

      You forgot the Sarin ready to blow in Syria, the new party going on in Tahrir Square, and you can’t forget our buddy Kim Jong Eun and his new I.C.B.M.’S

      • ronini3 says:

        Cheer up??? I am up! 🙂

        FIB, you forgot the most important calendar which will expire in a few days. Look, I have no beef with you, so let’s try to make some $$$, ok?

      • CB says:

        OK I3 ! and Fib, Stuxnet usually takes care of all the other political stuff…and ifyou can make a little effort to stay off of ‘substance’ when you come here then we can talk about some substance with you…otherwise it’s gonna be very you decide..

  7. currently have a 14.2% open profit in tna, sell target is at about a 25%- 30% profit level. holding a 20% allocation.

  8. now is the time to begin to prepare a plan for parting with under performing stocks,
    zlc is on the list, among others to be determined.

  9. fibretrace1618 says:

    I want to see you two crackheads jack this puppy up to the 200 mark by the closing bell. You can do it, break out the Addys and the Peruvian and make T.C. proud!!

  10. aquafam says:


    Wrigley Field.

    It’s a stadium(ball park), currently being used, and the Bears logged in more games there than any other NFL team.

    One more chance.

    Who was the QB for New England when they played the Bears in the 1986 Super Bowl?
    Clue……he went to the University of Illinois.

  11. fibretrace1618 says:

    I see Roni and LX are jacked up again. Just stopped by to tell you that this party is over!! The (4/2012 High) 1422 made a courageous effort, but she gave way and now we stare into the abyss. I know T.C. is holding onto the 1398 but these support levels have been beaten like a redheaded Stepchild over the last 6 weeks, I’m calling it right here right now. The next viable support is the previous 1343.35 low. Go Big Brothers Or Go Home!!

  12. ronini3 says:

    MRK finally moved!

  13. LX says:

    Oh look 10 handles from the high…ESH

  14. ronini3 says:

    APOL looks pretty good on the weekly with 18.36 stop. But I have ADHD…

    Sorry Lee, I know you frown upon those unsolicited trades.. 🙂

  15. ronini3 says:

    only 16 posts?! We need to pump it up! I see nothing today, so no trades..

  16. aquafam says:

    Is there some weird astro-physical alignment going on?

    My dog is acting very strange today.


  17. robslob64 says:

    Worthy to note Gold getting manhandled today…not a good sign for inflationary scenarios?

    • scatman12 says:

      Almost bought slv yesterday but did not. Seems like some big guys are doing what they always do i.e. screw the retail investor by taking the stops..

  18. torehund says:

    Here I go again, with some small cap stuff. Arrowhead (ARWR), developer of siRNA therapeutics has declined from 2008 in a long ABC. Fundamentally the share is not only sound but they have early stage drugs for both Obesity, Hepatitis B, and cancer. The two former have been tested with great success on Apes. Additionally they own a research plant worth 500 mill USD.
    I dont trade this stock as I play longer term (from 08) EW on it and mix with fundamentals.
    I just cant decipher how this share is sold off on anything other than its EW pattern. So I hold it as I should (in some time soon) have both EW and fundamentals blowing in my back.

    • tony caldaro says:

      These guys have had two reverse splits in the last decade.
      A 1 for 65, followed by a 1 for 10.

      • The Homeless Daytrader says:

        Cheap stocks that contimually fall to pennies are cheap because they are junk. There are much better places to put your capital to use. A family vacation, for example.

    • Igor says:

      if you are interested in playing RNA interference therapy stocks, pay attention to SRPT. The best stock IMHO in this field. Disclosure: I have a long position.

  19. M1 says:

    Tony, we had a wroc buy signal a couple of weeks ago. An uptrend confirmation yesterday. The Fed pumping more than US$1 Tln/year.
    Honestly, it looks quite bullish. Difficult to belive a bear market could be around the corner.

    • tony caldaro says:

      The waves are the waves

    • torehund says:

      Hello M1, back from Peru and Chicama trying to lure some waves out of nature. I agree with you on the stimulus that has not at all been priced in. FED will not save itself into poverty as no poor folks will be able to pay back their loans. Easiest way to create money out of thin air is to inflate all asset classes including stocks. A bear now is the end of capitalism as we know it, they are too shrewed not to appreciate this, or ?

  20. torehund says:

    I love the word fiscal cliff, how would the bulls survive without it ?

  21. StemSki says:

    Hi Tony,
    Your 2nd to last paragraph captures everything that someone needs to know. Lines have been drawn in the sand. In fact, I already put them on my stockcharts

    Great analysis as always

  22. LX says:

    Thanks Tony
    Time to make sure we’re prepared for this coming move.
    Battery back up/house generator
    Clearing house/Order desks current and direct phone numbers
    Land line phone/ Cell Phone/ Gmail phone *
    Hey it’s rollover 🙂

  23. fionamargaret says:

    Thanks Tony.

    Now, don’t we always sell off the afternoon of the Fed, but a big rally the next day,,,,,,,,but then we didn’t have the fiscal cliff hanging over everything.
    Need some co-ordination of announcements!

Comments are closed.