monday update

SHORT TERM: gap up opening sold off, DOW -216

Overnight the Asian markets gained 0.9%: mostly Japan. European markets opened higher and gained 1.0%. US index futures were higher overnight, and the market gapped up at the open to SPX 1523. The market had closed at SPX 1516 on friday. In the opening minutes the SPX hit 1524, dipped to 1521, then rallied to 1526 by 10:00. That was the high for the day. Soon after the Euro started to sell off when concern arose about the Italian elections. European markets declined and the SPX followed. By 11:00 the SPX closed the opening gap when it hit 1514. The SPX bounced 1519 by 11:30, then dropped to 1508 by 12:00. Another rally attempt failed at SPX 1514 by 1:00, then the SPX dropped to 1502 by 2:00. One more rally attempt failed at SPX 1507 by 3:00, then the market dropped nearly 20 points to 1488 by the close.

For the day the SPX/DOW were -1.70%, and the NDX/NAZ were -1.40%. Bonds gained 27 ticks, Crude slid 80 cents, Gold rallied $13, and the USD was higher. Medium term support drops to the 1440 and 1386 pivots, with resistance now at the 1499 and 1523 pivots. Tomorrow: Case-Shiller and the FHFA housing index at 9:00, then New home sales and Consumer confidence at 10:00. Also at 10:00 FED chairman Bernanke presents the Semiannual Monetary Policy Report to the Senate.

The market gapped up at the open today for the second day in a row. This gap up, after hitting SPX 1526, was sold off nearly as quickly as it occurred. During the early morning surge the SPX came within 5 points of its uptrend high, while the DOW made a new high. The SPX ran into resistance at the 1523 pivot, the market then sold off throughout the day. At the end of the day the market had broken the 1499 pivot range and closed at SPX 1488.

Two potential scenarios come to mind. First, Minor wave 4 of this uptrend is still underway. Second, we just experienced another Minor wave 5 failure in the SPX. With the DOW making a new uptrend high today this would somewhat support the second scenario. Maybe we have just seen the uptrend high and are already in a correction. The timing is about right, but the uptrend is much shorter than expected. Unless Intermediate wave iii is subdividing. Which would appear quite unlikely considering the overall pattern of the bull market. The two options, from our perspective, are a difficult call at this time.

Short term support drops to SPX SPX 1463/64 and the 1440 pivot, with resistance at the 1499 and 1523 pivots. Short term momentum swung from extremely overbought to quite oversold in one day. The short term OEW charts turned negative in the morning with the reversal level now at SPX 1513. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

Investor
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190 Responses to monday update

  1. torehund says:

    Expecting soon the euro to resume its uptrend vs the dollar, and in a BIG way..

  2. theyenguy says:

    You write that the market is in a long term bull market.

    I reply that this is incorrect.

    The very linchpin of ECB sovereign debt support, as well as the capstone of Liberalism’s Banker Regime of Credit Stimulus, has collapsed, as Greece, GREK, traded 8.2% lower. The nation that defines Clientelism, Barriers To Competition, Unionism, and Corruption, is leading Europe, and the World into Investment, Economic and Political Failure.

    Sovereignty begets seigniorage, that is moneyness, and trust in the debt of the sovereigns, that is in the US, VTI, Germany, EWG, Spain, EWP, Italy, EWI, Greece, GREK, Germany, EWG, China, YAO, Australia, EWA, Japan, EWJ, Norway, NORW, Finland, EFNL, Sweden, EWD, and others produced Peak Commodities, DBC, on September 14, 2012, Peak Credit, on December, 6, 2012, Peak Wealth, on January 28, 2013, and Peak Currencies, and thus Peak Seigniorage, and Peak Prosperity on February 11, 2013.

    The sovereigns of Liberalism, nation states and their central banks gave seigniorage to money, that is wealth, producing the seigniorage of investment choice. Asset Managers such as BLK, WDR, EV, STT and WETF, Investment Bankers such as JPM, the World’s Leading Banks such as SAN, NBG, RBS, LYG, BCS, HDB, IBN, and UBS, The Too Big To Fail Banks such as BAC, and C, the Regional Banks such as SNV, HBAN, and RF, coined Liberalism’s money, consisting of fiat investments; some of which were given more seigniorage than others, such as Gaming Stocks, BJK, Leveraged Buyouts, PSP, Small Cap Growth Companies, such as CSL, Global Producers, IP, and GE, Dig And Dirt Equipment Manufacturers, MTK, Agricultural Companies, MON, and Small Cap Revenue Companies such as LAD, to name just a few.

    Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

    New seigniorage, that is new moneyness, is coming on the death of the fiat money system, that is on the death of the Milton Friedman Free To Choose Floating Currency Regime. The sovereigns of the Era of Credit and the Epoch of Fiat Asset Appreciation and the Age of Prosperity are dying on the exhaustion of the world central banks’ monetary authority and on the death of of currencies. Kayla Tausche of CNBC reports JPMorgan to slash 4,000 staff, $1 Billion in costs. And Bespoke Investment Group reports Euro Spreads widen out. Bloomberg reports Bank credit risk surges in Europe amid Italian election deadlock. The cost of insuring against default on European bank debt surged to the highest in three months on concern deadlock in Italy’s elections will trigger a flight from risky assets as a political vacuum roils markets. Gridlock in parliament means gridlock in the economy, Alberto Gallo, the head of European macro credit research at Royal Bank of Scotland Group Plc in London, wrote in a client note. The longer the instability lasts, the more the recession can deepen, pushing up unemployment, defaults and bad loans. In the worst-case scenario, the weaker banks could see deposit outflows re-emerge ” The Markit iTraxx Europe Index of swaps on investment-grade companies rose seven basis points to 120, the highest since November 30, 2012.

    Operating through Destiny, Revelation 1:1, Jesus Christ is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism, and with that, Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, in fulfillment of Revelation 13:1-4.

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