tuesday update

SHORT TERM: new uptrend highs, DOW +116

Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and at 8:30 the Current account deficit was reported lower: -$107.5 bln vs -$117.4 bln. The market opened one point above yesterday’s SPX 1430 close and started to rally. At 10:00 the NAHB housing index was reported at its highest level in six years: 47 vs 46. The rally continued into the afternoon with small three point pullbacks along the way. At 12:30 the SPX hit 1447, pulled back to 1442 by 2:30, then rallied to 1448 just before closing at 1447.

For the day the SPX/DOW were +1.00%, and the NDX/NAZ were +1.50%. Bonds lost 16 ticks, Crude gained 75 cents, Gold dropped $24, and the USD was lower. Medium term support now jumps to the OEW 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: Housing starts and Building permits at 8:30.

The market opened slightly higher today, then entered the OEW 1440 pivot range, (1433-1447), and hit the upper end, and closed there. Since the previous high of this uptrend was SPX 1439, Minute wave iii of Minor 3 certainly appears to be underway. This two day rally from friday’s SPX 1412 low looks like one wave. We would expect it to get a bit higher before any 10+ point pullback occurs. The SPX has now hit the mid-point of the bull/bear inflection range: 1434-1462. The DOW appears to be lagging some.

Short term support is now at the OEW 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum hit extremely overbought today then backed off. The short term OEW charts remain positive from SPX 1420, with the swing level now around 1425. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: market now in bull/bear inflection range

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

About tony caldaro

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45 Responses to tuesday update

  1. CB says:

    think we got the second impulse with +d at the end – so I have nibbled a bit. 😯
    thanks Tony!

  2. fibretrace1618 says:

    Anyone in the ^RUT, looks to be rolling over putting in a H&S from today’s top of it’s right’s shoulder from the 3/26 left shoulder and the 9/14 head.

  3. fibretrace1618 says:

    T, regarding last night’s post: When I say 1463/1474 I’m saying 1463-1474 (all points in between). Today’s action looking bearish at this point, back through the 12/12 high.

  4. The Homeless Daytrader says:

    What are the chances that both the Dow and L’Oil have topped on the very same day? I’m just going back to sippin’ me eggnog and singin’ “I’ll be short for Christmas …”

    • fibretrace1618 says:

      You should be home & short for Christmas H.D. I think that’s how the, “I’ll be home for Christmas” song goes.

  5. pbnj123 says:

    10 point bots?

  6. scorp100 says:

    UVXY jumped today. May be VIX is trying to say something.

  7. CB says:

    oh my my, the Moon is in wateryPisces today, and some people just want to immerse themselves in something ….liquid. This too shall pass…Good news is tomorrow the Moon enters kick-butt Aries, so all the fog will lift…Lee, put away that stuff and start working on your next big idea, OK? GL!

    Seems to me we got 5 waves down on 1 min this am,, then some corrective squiggles, so I am waiting for a little better price to get in…whio knows if they come up with a quick soultion, I;ll be left in the cold..so what else is new

    Thanks for the interesting info. RC!

  8. aquafam says:


    Take a stroll down LaSalle St. Go south. If you bump into CBOT your on the right path. 20 more minutes its noon CST. Is that good enough for the “olde” Ceres?

    Pint of Guinness with a couple sides of Jameson’s.

    Next, call a cab.



  9. thoth8 says:

    Hi Tony,
    What is your thoughts about Oil and Gold?
    Thanks as always!


  10. vishal409 says:

    Dr Lee, whats your gut feel for the S&P as of now?

  11. bob623 says:

    Are we in the next wave down and getting our 10+ points lower as mentioned yesterday in your blog? Thanks!

  12. LX says:

    Take profits get drunk

  13. rc1269 says:

    Good morning, Tony

    Just thought I’d give you a quick update from the institional credit world. Have been unseasonably swamped lately so haven’t really had much time to post. Anyhow… it’s been what we call a “rip fest” lately. Accounts are starved for yeild and the grab for any and all credits with any modicum of juice (spread) left is instatiable. New issuance this year was a record, and the expectation is for that to continue into next year.
    Broadly, the refinancing/deleveraging trend of the last few years is all but dead. Many of the recent deals have been either acquistion financing or shareholder enhancement (borrow to fund a special dividend, etc…). Releveraging is back in full swing, at least at the corporate level. The global trend might take a little more time to work itself out, however, as it’s now Government’s how are embarking on the deleveraging cycle.
    Heading into year end the general sense is that things are pretty fully valued in the credit space. Cash has largely been put to work (for now, until there’s more) and folks are pretty much just hoping that markets hold up and the whole fiscal BS doesn’t become a complete debacle. The outlook for 2013 is muted but generally optimistic. If rates continue upward and releveraging transactions remain en vogue, credit will begin to underperform. For a time, I think that draws in dip buyers in the asset class. However, in the fixed income realm many institutional investors are already considerably overweight credit. So if the trend of underperformance is sustained, I believe the dip buy will give way to asset rotation out of fixed income and starting back into equities. But on a large scale that trade still feels some time in the future.
    For now, investors are largely moving into a barbell strategy of high quality fixed income + a growing component in private, real assets (timber, infrastructure, energy). The real asset allocation is to provide a hedge against any future inflation spike, which would decimate their fixed income holdings. For the time being equities seem to be somewhat of a no-man’s-land for institutional asset allocators. The threat of global deflation, weak growth, and fiscal drag seem to be perfectly offset by the relatively attractive dividend yeild and unattraciveness of other asset classes.
    Perhaps consistent with your theme that we are at a bull/bear inflection point, it would seem that some catalyst needs to happen to either push the view on equities into either decidedly positive or negative territory for the next year. That’s all I’ve got my man. Thanks for all you do and happy holidays!

    • tony caldaro says:

      Releveraging in the Private sector, deleveraging in the Public.Check!
      As you know we are bearish on Bonds long term.
      Real asset allocation makes sense considering an umlimited QE 3.
      It appears, we’re either at the stage when everyone gets comfortable and the bull market continues.
      Or, everything is priced in and the bear market kicks in.
      An interesting situation with the backdrop of the Fiscal Cliff and 2012.
      happy holidays … we all appreciate your view from within.

    • pbnj123 says:

      Thank you rc – very informative.
      I like reading your updates as I never really pay attention to credit and rates but I do pause to read your insight and it is appreciated.

    • timing101 says:

      Thanks RC!

    • LX says:

      Thanks R C for all you do here !

  14. fibretrace1618 says:

    T, always appreciate your knowledge and truly “objective” analysis. You can find an infinite amount of analysts on line, but a truly objective one is a rarity. That being said, I was just curious why this segment of your sentence in today’s update where you say: (“resistance at “SPX 1463/64 and the 1499 pivot”) which excludes the 9/14 High as resistance. Is that a typo and should be reading 1463/1474. I only ask because of the significance of this particular high, along with a couple of Fibs and a certain holograph.

  15. http://standardpoor.wordpress.com
    we may have just entered the strongest phase of wave 3 rendering the likelihood of my previous guesstimate of no more than three more weeks of rally with out teeth. go stocks, go.

    see comments section of blog.

    • torehund says:

      S and P: I fully agree this is a highly geared inflection point with a lot of nonsensical neurotic stuff (Cliff, Mayas) swirling around, and folks are mentally steered by it. This becomes a mental coiled spring, unleashing a thrust when the masses come creeping out of their shelters. Indexes havent moved much for years and we are heading into 3 + precent of GDP. Earnings should be fine too.

  16. torehund says:

    My micro cap pharmas and others jumping a little up and down, more up than down, and creating pos convergence. ARWR had excellent news went from 2,5 to nearly 3 and the boots sold it off down to 2,27. This market isnt ran by just flesh and blod thats for sure.
    3 days left…

  17. timing101 says:

    Thanks Tony. Micro wave 1 of Minute wave iii, 36 points and counting?

  18. pas1968 says:

    AAPL… any further thoughts anyone?
    Do we have an intermediate term bottom or not?
    I bought some just below todays closing price & was waiting for a close below $500 to accumulate more however a close below $500 more not occur in short term.

    • conannca says:

      Follow up Apple Question Tony:

      Well today we crossed over the 10DMA and it appears that we may have completed Wave 4 with lower low and postive divergence on Monday and 1 of Wave 5 has begun. It appears from your chart we may still be at 4 of C of Wave 4 down and still have a 5 of C down to complete Wave 4. Your thoughts would be greatly appreciated.

      • tony caldaro says:

        Onr could count today’s low as a positive divergence with the previous low.
        This definitely appears on the weekly chart.
        If AAPL can take out the recent high we’ll probably get an uptrend confirmation.
        Then we will see if it can make the last push to new highs.

      • conannca says:

        Awesome Tony!!!!!!!!!
        Here’s to reaching and taking out $595 + to get this Wave 5 really going so we can get out of the mess.
        Thanks for all you do!!!

  19. alexh110 says:

    Gold is taking longer than I thought to complete it’s Int ii downtrend; but seems to be getting close now.
    There’s a positive divergence on weekly RSI; but weekly MACD has not yet fallen to support (green line) to match the left shoulder. So the price may have further to fall if it’s going to repeat the inverse H&S pattern of 2008/9:

  20. rc1269 says:

    thanks Tony! things are getting interesting

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