friday update

SHORT TERM: budget agreement rally fades, DOW +16

Overnight the House passed a two year bipartisan budget, Senate voting and Presidential signing next week. Asian markets lost 0.2%. Europe opened lower and lost 0.1%. US index futures were much higher overnight but faded into the open. At 8:30 the PPI was reported lower: -0.1% v -0.2%. The market opened four points above Thursday’s SPX 1776 close, hit 1781, and then began to pullback. Around 10:30 the market retested yesterday’s low at SPX 1772 and tried to rally with a short term positive divergence. At 1:30 the SPX hit 1779, pulled back to 1773 by 2:30, bounced back to 1779 by 3:30, then end the week at 1775.

For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds ended flat, Crude slid $1.00, Gold rose $11, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 and 1828 pivots. Last night the FED reported an increase in the Monetary base: $3.716tn v $3.689tn. Today the WLEI was reported lower: 52.8% v 52.9%.

The market opened higher today, then, simply put, traded within the OEW 1779 pivot range for the rest of the day. Today’s low, SPX 1772 could have ended the first part of a larger ABC structure from the SPX 1814 high. Thus far we can count an A: 1786-1800-1779, a B: 1796-1783-1812, and a potentially completed C: 1772-1783-1772. If so, we should see a decent rally next: possibly into the 1790’s. If not, once 1772 is broken the decline will continue on the downside.

Short term support is at SPX 1746 and SPX 1730, with resistance at the 1779 pivot and SPX 1814. Short term momentum displayed a positive divergence at today’s low and rose to neutral. The short term OEW charts are still negative with the reversal level now SPX 1786. Best to your weekend!

MEDIUM TERM: uptrend weakening

LONG TERM: bull market


About tony caldaro

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55 Responses to friday update

  1. Still going to 1822-29 santa rally, no change in forecast we made in early September of 1829 for Major 3 of Prim 3. Below 1759 and Major 3 ended at 1811. That said, las action looked like Minor 4 of 5 of 5 of Major 3…. 1822-29 all kinds of nice fibonacci and wave lengths line up for a perfect end of year top, and Major 4 correction Jan-Mar 2014

  2. mcmasoniam says:

    I don’t have all the data points that others do; only the patterns that I see in my twisted mind. Was looking at various charts (not mine; which have more chicken scratches than tore’s) for a while this evening, and I think,

    1st choice: This DT is Int. IV of M5, instead of Int. II.
    2nd choice: This DT is start of P4.
    3rd choice: This DT is Int. II of M5.

    3rd choice means Int.III of M5 would have to carry quite a large amount of points with it upward, as the previous UT was huge! Granted, w1 could be larger than w3, as long as w3 isn’t shortest, but, I don’t get a comfortable feeling with the Int. III scenario, even w/truncation thrown in the mix, and even with so many other markets in confirmed downtrends, I’m not sure it’s reasonable to expect a large amount of additional points; but “reasonable” has not been the best of adjectives describing this market.

    Anyway, that’s the way I see it. Still up, but with seriously added caution. Everyone’s allowed a theory, and this is mine…for now. LOL!

    To bed early, as kids have more early activities tomorrow on their final day here. We’ve all had a great time, esp. the kids. Some have never sat a horse in their lives and are now riding T’breds! The horses, and esp. the Pigmy Goats love the attention.

    Have a great weekend All! M

    • torehund says:

      M- there really haven’t been the full throttle, let loose all you fears, and lets go for it feel to this bull, its like you get a little up in speed and then a correction making the many pitons like the one we are coming off now. Sure the bull doesn’t have to end with a big bang, but it could…But it is a don’t risk more than you can afford to loose time thats for sure.

    • mcmasoniam says:

      Well, this explains why I couldn’t find my post under Weekend Update…

      Morning tore. I’m not of the belief that a cyclical Bull (or any other) has to end any particular way, except that eventually it has to end. At this time, I think whenever P4 occurs, it will be of such a nature as to scare the daylights out of many, AND bring in many on the sidelines, and the ultra-greedy to invest 100% into stocks. P5 will have them all smiling… until it doesn’t.

      I do have an opinion on a couple of ideas I read regarding Fisher(sp?) and other Fed Hawks putting ‘pressure’ on JY to get QE taper or halted. If only I could be a fly on that wall! Translated into plain language, this means that a number of the guys are going to gang up and TRY to BULLY Yellen into doing what they want. Keeping in mind that in the end, ALL the power lay w/Yellen and nobody else; yeah, like bullying is going to work, and as if she’s not expecting it. She likely will taper or end QE sometime in 2014, but will have to do so at a time of HER choosing; make darned sure it doesn’t look to favor any one FedHead’s wish, but appears to be her choice, by leadership, of course.

      Hope everyone’s keeping warm. It’s about 45 degrees with sunny skies here, and little wind. One of those truly refreshing mornings.

      GL to All next week. It promises to be interesting. M

  3. 777daimon says:

    yes, seems like Primary III is over.
    I changed positions.
    GL all.

  4. mcmasoniam says:

    Much thanks to you, Tony. Hope I get time to read WEUpdate in the morning. Lots of Guests to feed in the morning, so up early to get breakfast on the tables. Have a great weekend! M

  5. torehund says:

    Well, selling out some holdings, and will probably regret later. However, stock trading is stressfull, not only what you do, but what the system does to you. Sitting in small caps with reverse splits and selling is not what the financial bureaucracy is currently handling well. So they make a lasagna of it, and there you have some extra work proving you did all the right moves. This is annoying, not only do we have to make the right choices ourself, we also have to have a broker that knows what he or she is doing.
    Its like the hospitals, sometimes you are admitted for appendicitis and end up with one leg less and even the wrong one removed. What can you say ?
    Then its good to flee to the outskirts of civilization…out of the way, just live in undisturbed tranquility and think of nothing, just Iive day by day not think of whats ahead. Thats exactly what I plan to do, in a short while.

    Good weekend to all of you !

      • torehund says:

        Thanks M. Think there is a little more downside to it the macd is crossing on the daily. I will just keep some positions one solar and one device maker called MELA and forgettaboutit until 2 nd day of christmas, let them fare without supervision. Well thats my plan, too stressful to be baby siting over an extended period. Maybe I will get a torttia in the wrong meatspace that day, who knows, if I am gone for that timespace I don’t know.
        However the problems with the selling of free shipping and the lasagna they made of it tells me enough is enough, or I will need strong medication if not to immediately explode into the stratosphere of unsolved frustration, lol.
        Be kind and helpful to anyone around you, and you have a nice christmas ! If I sneak around, it will be somewhere in Huatulco.

      • mcmasoniam says:

        torehund, of all the bloggers here, your blogs are the most interesting in the way of hearing a phrase I’ve never heard before, or wouldn’t (couldn’t) even think to try to put into words. Ex. “Maybe I will get a tortilla in the wrong meatspace that day, who knows, if I am gone for that timespace I don’t know.” The first part, about tortilla in the wrong meatspace, anyone from Texas would get it. Classic! Hang in there. GL and GS! (Good Surf) M

  6. bouraq says:

    Bears have a chance here:

  7. pcskier says:

    Lot of bullish sentiment on this blog, with 2013 up 23% YTD, greed running rampant and no fear of a pullback seems like a perfect time to be bearish. Bit coin chart is a symptom of too much liquidity. The fed is not blind, since unlimited QE the market is up ~40%. $tnx is treading up, enough said.

  8. Thanks Tony. We didn’t see the panic reaction that usually happens in C wave. May be Monday morning gap down and recover by evening?

    • jparkins10 says:

      The data supports this view:

      Monday of OPEX:

      High probability of a gap down open. This year, 3 up opens in 11, 2 with large gap ups, 3 medium gap downs, 5 smallish gap downs.

      2 of 11 with strong upside from the open, average is 0.5% up

      2 of 11 with strong downside from the open, average is -0.6% down.

      5 neutral closes, 1 down only (it was big though, April), 2 good up closes, 2 medium up closes. Last 6 closes have been positive.

  9. RDC says:

    Thanks Tony!
    Markets will rally hard next week right after Fed meeting, it could be Year-End/Christmas rally.

  10. radrian6 says:

    Hello all,
    For the past two days, RUT has printed a small oscillating pattern with a slight upward bias — it could be interpreted as a bear flag or a rising megaphone and this suggests more downside. But, as always, things are not that clear because I have a number of potentially bullish indications as well. My 10-, 20-, 40-day cycle indicators are bottoming and this suggests RUT is ready to move higher. My hourly Choppiness Index shows RUT is fully recharged and ready to break one way or the other. The daily Slow Stochastic (14) is all the way down to 9.1, and finally, RUT has tagged rising daily support and has held for three days.

    My longer-term indicators still suggest that RUTs potential upside is limited until it fully consolidates and corrects the outsized gains of the past year and that would require more downside and more time. Putting it all together and predicting an outcome is never easy, is it?

    For the near term, all we can do is monitor RUTs response to certain price levels. If RUT moves higher, watch the reaction at 1111.63 and 1119.33. Also watch the Fib retracement levels at 1118, 1123, and 1129. If RUT moves above 1129, I would assume it will retest the high of 1147. If RUT moves lower, watch the reaction at the lower daily Bollinger Band near 1095 and the weekly middle BB near 1081. If RUT breaks below 1079, I would assume it is in a serious correction and will move substantially lower.

  11. CB says:

    Thanks Tony
    Good weekend to all

  12. lunker1 says:

    Minor A if 1760 = 52
    Minor B HWB = 1786
    Minor C=.618A = 1753*
    Minor C=A = 1734*
    Minor C=1.62A=1702

  13. gtoptions says:

    Thanks Tony
    Good Weekend to all the OEW

  14. Thanks Tony, did you you hear about the “chatter” that Senate “might” kill the deal?

    We talked about this today🙂

  15. thanks Tony! it couldn’t really rally today despite all the + div; this may suggest one lower low before the next bounce!? Ideal target would be 1765ish. That be likely where the 50d sma will be within the next few trading days (now at 1761.74 and rising by about 2 points per day).

  16. lunker1 says:

    Thx T and Lee and HD makes 3

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