monday update

SHORT TERM: fiscal cliff drama continues, DOW +166

Overnight the Asian markets were mixed. Europe opened lower and closed -0.7%. US index futures were sharply lower after hours on friday, then rallied sunday night. At the open the SPX hit exactly 1398, set up a positive divergence, and began to rally. The market had closed at SPX 1402 on friday. By 10:30 the SPX had hit 1409, pulled back to 1404 just before 11:00, then rallied to 1416 just before 1:00. A pullback followed to SPX 1409 just after 1:00. Then the market rallied to 1418 just past 1:30, only to pullback to 1409 again just before 2:00. Then the market rallied again. At 3:00 the SPX hit 1425, pulled back to 1417 by 3:30, then rallied again to close at 1426. Nice rally.

For the day the SPX/DOW were +1.50%, and the NDX/NAZ were +2.05%. Bonds lost 18 ticks, Crude rallied 95 cents, Gold rose $15, and the USD was higher. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tuesday the markets are closed for New Years Day.

The market opened lower today, found support right at SPX 1398, setup a positive divergence, then rallied for the rest of the day. While the market did bounce around quite a bit today we can still see five waves up to SPX 1418, a decline to 1409, then a rally/pullback to 1425/17. The SPX ended the day just off a rally to 1427.

This 29 point rally is the best one since the decline began at SPX 1448. This suggests either the bullish Minor wave 2 ended at SPX 1398, or the first wave of the next downtrend. If the rally continues, the next attempt at the SPX 1434-1462 inflection range should be the key to 2013.

Short term support jumps to SPX 1422/27 and the 1413/16, with resistance at the 1440 pivot and SPX 1463/64. Short term momentum rallied from a positive divergence to quite overbought. The short term OEW turned positive today with the swing level now around SPX 1419. Have a happy/safe new year, and all the best in the coming year!

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull/bear inflection point continues

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

About tony caldaro

Investor
This entry was posted in Updates and tagged , , , . Bookmark the permalink.

143 Responses to monday update

  1. LX says:

    Guys …U do realize zerohedge made a bottom call @ 1398 SPX ?
    True story

    Like

  2. H D says:

    so S 1402 didn’t work 😯 best start to any year Tony?

    Like

    • CB says:

      nice # HD..& great jobon that !
      hey HD you know a bunch about wave 3 psychology and gaps, right?…didn’t you say one time recently that there were going to be nothing but gaps in wave 3? and the question I’d like to ask you : do they/or dont they get covered right away…what’s the theory on that? Thanks.

      Like

      • H D says:

        HNY CB, Ya. only commented that if we were to ever resolve the endless 1-2’s we would see gaps for a while going up. Then we trade 139X. So looks like psychology was right. 😆 then mountain tops looking down and we r at 1461. Psychology at it’s best.

        Like

      • CB says:

        HNY HD, the Psychologist! 😆 Well I hope they do get covered cuz I need to get back in. after I sold all my spx longs..Do you think this was d and we are headed to the final e now (from ur chart)?…OK…I am asking too much…

        Like

      • H D says:

        Choice Theory, all we have is data. That affects our behavior- primarily acting and thinking. MHO is that I do better only looking at micro data. 5 points is still a winner. I could be still buzzed though….

        Like

  3. mokiepon says:

    Holy C%&*, look at the buying coming into the VIX ETNs AH’s!

    M

    Like

  4. mokiepon says:

    Holy C%&*, look at the buying coming into the VIX ENTs!

    M

    Like

  5. LX says:

    GL guys !
    I’m pretty sure I know how this will end .
    See yas when we get there !

    Like

  6. mokiepon says:

    Sold a tad more a minute ago. Looking forward to Update. Have a good evening.

    Melinda

    Like

  7. torehund says:

    Flip inverted waves: June 22- 11 when the market started to tank. Look at the SP 500, take the graph after the 22 june 2011 and turn it upside down, you then get a perfect ABC from march bottom-09, a DE and then an ABC to where we would be as of today if that part of the graph was flipped upside down. Then it would have made a more natural wave 2 as the first ABC would have retraced back to 1000 or thereabout on the indexes. If we think like this the real wave 3 should now commence. Its all in the geometry…

    Like

  8. mokiepon says:

    Look how low the VIX and VIX ETNs are! I’m sitting on my hands after I finish this blog as I’m tempted to buy a bit of protection here.

    Melinda

    Like

    • tommyboys says:

      Why is it when the VIX spiked to over 19 the other day everyone was frightened of a market plunge and now that its selling way down I’m reading the same reactions? What would we LIKE to see in the VIX – if it even holds any meaning anymore – up, down or flat ?

      Like

      • mokiepon says:

        tommyboys, I’m not afraid of a mkt ‘plunge’, but believe in buying VIX, or anything else for that matter, when it’s cheap. Also, as I’ve watched the VIX in the past couple years, it doesn’t seem to like area below 15 very much, as it doesn’t stay there long. Just watching for now, but so want to buy!

        M

        Like

      • tommyboys says:

        Yes but what is a bullish market indication from the VIX – up, down or flat ? The VIX actually stayed pretty much in the 10-12 rnge for several years during the ’02-’07 bull. I could see muted volatility for sometime to come going forward (with periodic spikes of course).

        Like

      • mokiepon says:

        tommyboys, all I know to tell you is this isn’t ’02-’07. I’m not liking or disliking anything. There’s always a pullback, not necessarily a correction or plunge, but a pullback. I play the swings. That’s all. BTW, VIX at 19 is nothing compared to 2008-09…But this isn’t 2008-09, is it.

        Like

      • mokiepon says:

        tommyboys, with Debt Ceiling coming up, I think it’s very possible VIX will be up at least to the level where it was for Fiscal Cliff. Helluva fight brewing; worse than last year. IMO.

        M

        Like

Comments are closed.