friday update

SHORT TERM: gap up and go day, DOW +199

Overnight the Asian markets gained 0.4%. European markets opened higher and gained 0.8%. US index futures were much higher overnight, then moved wildly after the monthly Payrolls report: +203K v +204k, and Unemployment: 7.0% v 7.3%. Also at 8:30 Personal income was reported lower: -0.1% v +0.5%, Personal spending was higher: +0.3% v +0.2%, and the PCE was higher: +0.1% v +0.1%. The market gapped up at the open to SPX 1800 and continued higher. The market had closed at SPX 1785 yesterday. Near 10am Consumer sentiment was reported higher: 82.5 v 75.1 and the SPX hit 1802. Also at 10am the FED: Then after a small pullback to SPX 1797 by 10:30 the market moved higher again. At 2pm the FED: Also the SPX hit 1806 and began to pullback. At 3pm Consumer credit was reported higher: $18.2bn v $13.7bn. The pullback was again small as the SPX touched 1801 by 3:30, then bounced to close at 1805.

For the day the SPX/DOW were +1.20%, and the NDX/NAZ were +0.75%. Bonds were flat, Crude added 30 cents, Gold rose $2, and the USD was flat. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Last night the FED reported a slight rise in the M1-multiplier: 0.709 v 0.707. Today the WLEI was reported higher: 52.9% v 52.7%.

The market gapped up at the open for the first time since November 21st. That was the day after the SPX 1777 low. After a 15 point gap up to SPX 1800, the SPX gained six more points before fading some into the close. Until today the SPX had declined for five straight days, and it nearly made it all back in just one day. Quite a rebound! The market action from last Friday’s SPX 1814 all time high displays: an abc down to the 1779 pivot, and now, possibly, an abc up to 1806. Should the market clear SPX 1814 the uptrend is most likely extending. Will review the charts for the weekend update and see where we are at.

Short term support remains at 1779 pivot and SPX 1746, with resistance at SPX 1810, SPX 1818 and the 1828 pivot. Short term momentum ended overbought today. The short term OEW charts turned positive at the open with the reversal level now SPX 1797. Best to your weekend!

MEDIUM TERM: uptrend rebounds

LONG TERM: bull market


About tony caldaro

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26 Responses to friday update

  1. 777daimon says:

    1814 target for Monday.
    If 1814 is taken with confidence, 1860-1870 (my old conservative target) is on tap for 28.dec.13 – 6 jan.14.
    Wild targets : 1920-1960.
    My bet is on the conservative targets. The wild targets I will follow them with a lot of cash in my pockets, not with a high exposure.
    I’m not betting on big wild corrections before 31.dec.13.
    The cause? :)?
    The bonuses for the wild asset managers …
    QE won’t be cut/or eliminated until the autumn of 2015 when inflation will become a problem. So, get used with the ride 🙂 …. It’s still 2013….

    • hucky2 says:

      Probability SPX above 1860 Dec 28th currently = 10.27%
      Probability SPX above 1860 Jan 17th currently = 17.75%
      Just FYI – anything can happen but these are statistical probabilities
      (which obviously don’t take the Market Manipulation Machine into account)

  2. Evening, Tony. Thanks … and, as always, looking forward to your weekend update with my coffee.

  3. jmoptions says:

    DJI current b wave retraced 61.8% of a wave. Also this last a wave bottom bounced hard off trend line from past highs of M3 and b of M4.

  4. M1 says:

    NDX Cycle wave 3 still unfolding at full speed. Now it is 1.725 times Cycle wave 1.
    Very impressive !!
    However, I still believe cycle wave 4 is around the corner, Just curious what could be able to hit this market. At this point, only a major negative event.

    • How about Profit taking for those who have profits of 30 percent for the year and wish to lock in those gains. Or those who might want to avoid the whole fed taper possibility. Or worries over congress ability to play nice together over a debit limit and budget. Howmabout the 10 year note over 3 percent. How about china / Japan issue over a no fly zone. Syria, Iran. How about a current pe ratio of over 20 percent with a forward pe of 16 based on 7-10 percent growth next year. Just a few possibilities to those who believe we are headed to infinity and beyond.

      I have no idea were the market is going. What I gather is a break above 1814 probably means we continue higher for the rest of the year. I sure hope not. To me it just means a much bigger correction in 2014. and may create larger problems for the world.

      A break below 1793 may take us to 1665 to start and then we see what happens from there.

      Maybe I am way off base , but with most analyst projecting a 1900 target on the sp 500 for year end 2014 and we are currently trading at 1805 there appears to be a big disconnect. Those of you who are long, more power to you. If your short, your time will come.

      Happy holidays to all and best of luck either way

  5. radrian6 says:

    Hello again,
    At the end of October, RUT started a correction with an a-b-c drop from 1123 to 1087. Following the first wave down, RUT followed with a fast 22-point wave b and finished with another a-b-c down to 1079. The current correction began with an a-b-c from 1147 down to 1112 and from 1112, RUT has risen 24 points to 1136. If RUT follows the previous pattern, it should finish the correction with a drop to 1102-04 by the middle of next week.

    • radrian6 says:

      The RUT 50-day SMA is near 1103 and the daily lower Bollinger Band is at 1092 and rising quickly. RUT has at least tapped the lower BB and 50MA five times since April.

    • gokalg says:

      Radian so after this correction what is your upside target and rough timing. Year end?

      • radrian6 says:

        Hello Go,
        In my post at 4:16 PM, I mentioned a long-term target zone of 1149-87. That target zone holds until a new (higher) target evolves from future price action. RUT has broken the pattern that has held most of the year so it’s tough to predict the short term. However, if RUT corrects to 1100 then bounces back next week, the logical target is a retest of the recent high of 1147 — that could happen late this year or early next year.

  6. Caldaro does today end the chances of that p4 correction?

  7. Thanks Tony. Regional banks index outperformed the whole market including big financial index XLF. Looks to me 5th wave extending. I will wait for your weekend update for a better picture.

  8. gtoptions says:

    Thanks Tony
    Good Weekend to All

  9. radrian6 says:

    Hello all,
    I wanted to offer a long-term observation on the RUT. In April 2011, RUT ran into resistance at 868.57 and began a serious decline into October eventually bottoming at 601.71 — a drop of 266.86 points. Over time, RUT climbed back and made several failed attempts to breach resistance and finally broke through in January 2013. RUT has been on a linear tear since the breakout. If you add the 266.86 points in the corrective pattern to the 868.57 top, you have a target of 1135.43 — RUT has slightly exceeded that target at 1147.

    If you go back a bit further in time, The 2007-09 bear market took RUT down to 342.59 and created a huge cup-with handle pattern with the neckline at 764.38 (left side) and 745.95 (right side). The target zone for this pattern is 1149 at the inside and 1187 at the outside. Also note that 764.38 acted as support for the September – November correction in 2012 — RUT bottomed at 763.55. If you have an appreciation for technical analysis and market symmetry, RUT is your baby.

    OK … flash forward to the current day. RUT is in a rising wedge with a target zone of 1149-87 and has already tested the bottom of that zone. If you have long-term investments connected to RUT, I would advise caution and maybe some prudent profit taking. RUT can certainly squeeze higher but the long-term target is close and RUT is displaying exhaustion on its monthly chart.

  10. waddaguess says:

    Looks toppy to me. But that can be fixed with a gap up come monday morning.

  11. pooch77 says:

    still long 401k,looking for a long entry on iwm cash account,still think we get one more push down then daily chart looks like it wants to go down.Still waiting for half way decent buy signal on iwm

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