tuesday update

SHORT TERM: higher opening rally continues, DOW +35

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.4%. US index futures were higher overnight, and at 8:30 the CPI was reported higher: +0.1% vs 0.0%. The market opened two points above yesterday’s SPX 1698 close and continued to drift higher. At 10:00 the NAHB housing index was reported lower: 58 vs 59. The rally continued into the afternoon when the SPX hit 1706. After a dip to SPX 1704 the market closed at 1705.

For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.75%. Bonds gained 6 ticks, Crude dropped $1.50, Gold added $1, and the USD was lower. Medium term support moves up to the 1699 and 1680 pivots, with resistance at the 1762 and 1779 pivots. Tomorrow: Housing starts and Building permits at 8:30, the FOMC statement at 12:30, then a FED press conference.

The market opened higher today, and continued to rally, with only two point pullbacks along the way, and made a new rally high at SPX 1706. Not much volatility heading into the FOMC statement tomorrow. Which is often accompanied by lots of volatility. Consensus suggests a $10bln tapering announcement tomorrow, but no additional tapering for three months. We think the FED may taper $10bln at each of the next four FOMC meetings. But this is only a guesstimate. There is also a good chance the inflection point will be resolved before week’s end.

Short term support is at the 1699 and 1680 pivots, with resistance at SPX 1710 and 1717. Short term momentum is displaying a negative divergence at today’s high, but no pullback yet. The short term OEW charts remain positive with the reversal level SPX 1686. Best to your trading tomorrow!

MEDIUM TERM: inflection point continues

LONG TERM: bull market

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

About tony caldaro

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357 Responses to tuesday update

  1. makiori says:

    closes above/below 80% of daily true range and violent moves, did I read a post around those topics a few days ago? if the author of that comment he/she ‘s around, would you mind to refresh my memory? thank you

  2. Big Up! says:

    The market seems to be granting some significance to the SPX 1723.

  3. scorp100 says:

    DUST biting dust.

  4. “We have got to turn the page on this kind of bubble-and-bust mentality that helped to create this mess in the first place”— Barack Obama, August 6, 2013

  5. daking66 says:

    i tried telling you EWite newbies. breakout was possible

    none of you guys entertained the thought

    • CN, good call, now about your 1729 target that was hit perfectly.

      NOW, Going down from here?

      • Big Up! says:

        Too early for anything but a day trade, but 1723 seems to be a level to watch. My last big up hit perfectly, traded in a narrow range for two days, triggered a Big Down, and dropped 80 points in two weeks. The Big Up before that fizzled for a about a 25 point loss. The Big Up before that hit its target at kept right on going for another 73 points.

        I have a feeling in my bones that 1723 is going to be the scene of a future crime. I have no idea yet how near or far that future is.

        Keep this is mind: All tradable declines start by first taking out the prior day’s low. So the market has lots of room to rest before making up its mind what it wants to do from here. When you are trying to hit for 80-100 ES points on a trade, it doesn’t matter if you miss the first 25.

      • Great, thanks CN!

        I really enjoy your comments, they make sense.

        Take care!

  6. llerias7 says:

    Forget about waves B or C…We must surely are at the top of minor 1 of wave 5 up!!


  7. mjtplayer says:

    The Dollar looks terrible, I was worried about the “action” in the buck over the past couple weeks but today is just plain ugly. 80.77 broken, 80.50 broken; both on very heavy volume today. Next stop is mid 78’s.

    Uptrend line from mid 2011 broken too. Stocks up 1%, but the Dollar is down 1%; so no change in real value. Oil and gold up 3%. Careful of the bond rally, could last a bit longer, but the dropping Dollar will increase inflation expectations, thus higher rates.

    Get out of Dollars!

  8. thoth8 says:

    People don’t you think that Russia and Brazil is bottomed before their Olympics? Even for the short term?

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