wednesday update

SHORT TERM: market pulls back, DOW -108

Overnight the Asian markets gained 0.5%. Europe opened lower and lost 0.2%. US index futures were lower overnight. At 8:30 Housing starts were reported lower: 890K vs 954K, Building permits higher: 925K vs 903K, and the PPI was reported higher: +0.2% vs -0.2%. The market opened one point below yesterday’s SPX 1531 close and continued to pullback. At 10:00 the SPX hit 1527, bounced back to 1530 by 10:30, then hit 1522 by noon. After a bounce to SPX 1526 by 12:30 the market drifted lower into the 2:00 FOMC minutes: After the press release the market hit SPX 1521, then jumped to 1525 a few minutes later. After that the market sold off to SPX 1511 near the close, and ended the day at 1512.

For the day the SPX/DOW were -1.00%, and the NDX/NAZ were -1.50%. Bonds gained 6 ticks, Crude slid $2.20, Gold dropped $39, and the USD was higher. Medium term support drops back down to the 1499 and 1440 pivots, with resistance again at the 1523 and 1552 pivots. Tomorrow: weekly Jobless claims and the CPI at 8:30. Then Existing home sales, the Philly FED, and Leading indicators at 10:00.

Wild day. The market opened slightly lower, then pulled back to SPX 1522 ahead of the FOMC minutes release. When the FOMC minutes reported the size and longevity of QE 3 will be debated at the next FOMC meeting in March. Uncertainty hit the market and it headed lower. Heading into the close the SPX hit 1511 retracing the entire rally from friday’s 1514 level to yesterday’s 1531. It appears our chart upgrade yesterday, to Minor 5 underway, was premature. The market had hit all our short term parameters and then immediately reversed. This has certainly been a tough uptrend to track, on a short term basis, since it first hit SPX 1510.

This uptrend has not gone high enough for a completed Intermediate wave iii. So it is possible the high of Minor 3 was hit yesterday and we are now in Minor wave 4. Should the market drop to around SPX 1500 this is probably the situation.

Short term support drops to the OEW 1499 pivot then SPX 1471/75, with resistance back to the 1523 and 1552 pivots. Short term momentum ended the day extremely oversold. The short term OEW charts turned negative in the afternoon with the reversal level now at SPX 1520. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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