wednesday update

SHORT TERM: interesting FOMC day, DOW -44

Overnight the Asian markets gained 1.0% – mostly Japan. Europe opened lower and lost 0.4%. US index futures were lower overnight. At 8:15 ADP was reported lower: 192K vs 215K, then at 8:30 Q4 GDP was reported negative: -0.1% vs +3.1%. The market opened one point below yesterday’s SPX 1508 close, bounced around in the opening minutes and made a new uptrend high at 1510. Then it started to pullback. Around 10:30 the SPX hit 1503. Then it rallied to SPX 1508 by 1:30 heading into the FOMC statement at 2:15: http://www.federalreserve.gov/newsevents/press/monetary/20130130a.htm. After that the market pulled back to SPX 1500 in the last few minutes of trading, before bouncing to close at 1502.

For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.25%. Bonds gained 2 ticks, Crude added 45 cents, Gold rallied $13, and the USD was lower. Medium term support remains at the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots. Tomorrow: weekly Jobless claims at 8:30, along with Personal income/spending, and PCE prices. Then at 9:45 the Chicago PMI.

The market opened slightly lower today, made a new uptrend high (SPX 1510), and then pulled back to SPX 1503. At that point we thought Nano wave 3 ended at SPX 1510, and Nano 4 at 1503, which is the top of Nano 1. Then we expected the market to rally, which it did, but it only reached SPX 1508 before weakening again after the FOMC statement.

Upon examining the short term charts, knowing SPX 1503 was now a key level for this Nano wave count. We noticed another potential count: a Minute iv ascending triangle starting at SPX 1495 and ending at 1498. With this potential count Minute v could have ended at SPX 1510, and Minor wave 3 as well. We then posted a “tentative” green Minor wave 3 label on the SPX hourly chart, with the obvious negative RSI divergence.

The real test for this second count is at SPX 1498, which would be the low of Minute iv. Should the SPX drop to/below this level, then Minor 3 probably ended at SPX 1510. If the SPX holds support above this level, then the market could still reach the OEW 1523 pivot as the rally from SPX 1498-1510 could be counted as a Micro wave 1, and this decline a Micro wave 2. Confusing right? Simply put, should the SPX reach 1498 again it could decline another 30 points, or so, for Minor 4. Should SPX 1500, or so hold support, the market can then reach 1523 pivot before the 40 point, or so, Minor 4 pullback gets underway. Markets get tricky when the become choppy.

Short term support is at the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term mementum setup a negative divergence and declined to slightly oversold. The short term OEW charts remain positive with the swing level now around SPX 1496. Best to your trading!

MEDIUM TERM: new uptrend high at SPX 1510

LONG TERM: bull market

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

About tony caldaro

Investor
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133 Responses to wednesday update

  1. blubrd67 says:

    Ronini,
    I just saw your objections regarding my joke about DeMark yesterday. Listen, relax, it was just a joke! 🙂 Really.
    I like this site among other things that most people don’t get offended easily, so let’s keep that spirit.

    If you want me to get serious on that, I highly respect Tom DeMark’s work, he has done some great stuff in the past. He is not a fluff, as he seems to be hard working at his theories, and has contributed meaningfully many times to the companies following him. I saw a short documentary oh his work. But I just couldn’t resist a joke, reading some of his thoughts where for months he was predicting that S&P will peak at 1492 and then expect 12-17% correction from that point. The exhaustion point was supposed to be 1-2 weeks ago, if I understood correctly when I read his remarks about a month ago. Even DeMark might be laughing at himself, as I’m doing when I made my mistakes.

    We occasionally have here “prophets” coming, and you recognize a false prophet pronouncing clenching firm opinions as to where the market was heading. Some politely, some rudely challenging Tony’s ideas. Even ridiculing his “followers” for blindly following his ideas, as in Erka’s case, and occasionally David. I don’t think there is anyone here following Tony cultishly, far from that… or making decisions blindly.

    David Banister was here last year, a few times strongly in-your-face arguing how Tony was terribly wrong, and market was about to be flushed down seriously. Again, David made some great comments in the past also, but all his most pointy, inflammatory remarks turned out to be wrong. So was TheYenGuy with: “Mark my words, today is the peak, now we are going down” statements. So unfortunately DeMarks expectations didn’t happen either, as we passed 1500. He also expected that only S&P will touch new highs, but NOT Dow or Nasdaq. Again wrong. I’m not putting DeMark down…, just couldn’t resist as it appeared comical to me at that point, without any evil intentions. I wouldn’t be offended if someone made a joke about me, if I were wrong. Which I just was…:) I expected that the market will start going down sometimes next week, not this week, but it looks like I’m wrong. Although the game is not over yet. 🙂 So lighten up, and smile.

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  2. leelee64 says:

    Have a gooden everybody !

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  3. mokiepon says:

    I’m not claiming any knowledge or intuition here, but January is the biggest hiring month of the year, so I’m thinking the Report should at least meet 166K. (That’s actually a pityful number, IMO.)
    M

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    • rc1269 says:

      is that before or after the seasonal adjustment that is 5x the size of the unadjusted number?

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    • rc1269 says:

      if you look at non-seasonally adjusted payrolls (ie, that actual data), January is, in fact, the largest firing month of the year

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    • mokiepon says:

      rc, your guess is as good as mine. 166K is the expectation. That’s what will move mkts. IMO.

      M

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      • torehund says:

        M-pessimism fuels market, when its unfounded. Unemployment is good for markets, as fixing the problem fuels stocks through low interest rates.

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      • rc1269 says:

        i hear ya, and agree. the funny part is the reported number is about as close to garbage information as you can get. first, the standard deviation on that data is about 30k jobs. if we beat by 10k folks will whoop and holla. making it even more worthless, the seasonality adjustment – a purely statistical construct and in itself fraught with substantial margins of error – has averaged over 3x the reported number over the last 12 months. take december’s “155k” jobs number. non-farm payrolls actually declined by -243k in december. we get to the healdine number by applying a +398k seasonal adjustment – the adjustment alone is 2.5x the reported number! complete garbage. but the market moves. proving the ‘market’ is pretty much also garbage. which is why we look toward technicals rather than trying to make heads or tails of fundamentals.

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  4. CB says:

    Tony, RU gonna change that ‘careful 3’ to 3 now?…I know, Iknow…I am being impatient

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  5. torehund says:

    If sp 500 drops straight to 1496, we then have a double complex abc.

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