tuesday update

SHORT TERM: pullback continues, DOW -9

Overnight the Asian markets gained 0.1%. Europe opened lower and lost 0.9%. US index futures were relatively flat overnight, and at 8:30 the CPI (0.0% v -0.1%) and Current accounts deficit (-$94.8bn v -$98.9bn) showed slight improvement. The market opened one point below yesterday’s SPX 1787 close, and headed lower. At 10:00 the NAHB matched its highest level in years: 58 v 54. The market continued to pullback until 11:30 when the SPX hit 1777. After touching oversold it started to rally. The rally continued until 2:30 when the SPX reached 1785. Then a pullback into the close ended the day at 1781.

For the day the SPX/DOW +0.20%, and the NDX/NAZ were +0.15%. Bonds gained 11 ticks, Crude slipped 40 cents, Gold slid $10, and the USD was lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: Housing starts and Building permits at 8:30, then the FED’s FOMC statement and press conference in the afternoon.

The market opened lower today and soon thereafter took out yesterday’s SPX 1784 low, suggesting Minor b was still underway. By late morning the SPX hit 1777, was oversold short term, and started to rise. We posted a green tentative Minor b label at that low. Should this be correct the market should now rally into the mid-1790’s, or so, to complete Minor c and Intermediate wave B. With the FOMC day tomorrow this is quite possible.

Short term support remains at the 1779 pivot and SPX 1746, with resistance at SPX 1814 and the 1828 pivot. Short term momentum hit oversold today then bounced to neutral. The short term OEW charts turned negative shortly after the open with the reversal level now SPX 1785. Best to your trading on the often volatile FOMC day!

MEDIUM TERM: uptrend trying to re-establish

LONG TERM: bull market

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

About tony caldaro

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159 Responses to tuesday update

  1. travis01 says:

    As always I respect you and your blog. I rarely post, but read daily for a few years now. Am also a student. Funny (and irritating) watching certain posters always claim “I told you so” every time something happens while somewhat belittling those who made the wrong choice in a trade. Seems petty to me. “It was clear if you knew what you were doing”. Oddly most of those guys made claims to both the up move and down move, just depends on which post you read 🙂

  2. jparkins10 says:

    Jason Goepfert ‏@sentimentrader
    $SPY has been +1% to a 52-wk high on FOMC day 4 times. Next 20 days:

  3. jjjzzzwww says:

    looks like Int. iii

  4. DOW inches away from new ATH…

    • pbnj123 says:

      This is no c wave is it?

      • budfox9450 says:

        Not Likely….

      • It still can be since the ATHs haven’t been taken out, but looks too impulsive imho for anything else than the start of a new wave up, imho. We can’t be 100% certainly till it passes 1813.55 on the SPX, but… a daily candle that size, imho, will resonate for quite some time over the charts’ fabric (to the upside that is).

        IMHO, either Tony’s i and ii of Major 5 are in or my iii, and iv of Major 5 count. Both counts suggest new ATH (and the bubble-blowing market Tony has warned us off may have arrived…)

      • jmoptions says:

        I have 1813 as Int. 3 of Major 5 and todays low as Int. 4 now. Int. 5 then to new highs, I predict 1825-1830, as a few others have stated.

  5. mjtplayer says:

    Gold = lows of the day
    Dollar = highs of the day
    Bonds = near lows of the day (highs in yield)

    All of these make sense as the Fed begins and progresses through reduced money creation and bond purchases.

    Stocks = near the highs of the day??

    • blackjak100 says:

      I’m glad I stayed the course with gold being short and even added at the spike today. IMO, heading sub $1200 where I’d think about buying near $1170 if it gets there.

  6. mjtplayer says:

    S&P up 40pts in 1hr 20min, all the BOTS switched-on today

  7. 777daimon says:

    I have so much more to learn.
    so much more…
    thank you to all here and to Tony.
    one of your main quality is patience.
    thanks for that.

  8. Thomas Crown says:

    Strange reaction from Gold and USD. With Bernanke reiterating ever other sentence that FED will keep rates low for ever, one should have thought Gold would have taken off tonite and USD would have tanked further.

    • rc1269 says:

      sort of in keeping with the ‘taper is neither bullish nor bearish’ theme, IMO. all trends are just continuing, picking up where they left off. easy cheesy
      the Fed doesn’t bother itself with popping bubbles, only creating them
      this is their effort to help wring out some of the excessive risk taking in the market.

  9. pcskier says:

    $vix is screaming buy me right now but I am a coward, lol. The fade should be on now

  10. By tapering some Fed has taken off the wall of worry. Now only Tony’s daily wall of worry posts remain.

  11. H D says:

    Kudos guys! I know alot of you have been bulls**t I mean bullish :mrgreen:
    enjoy the extra cash. USA! and Happy Festivus!

  12. Tony, INT III?

    CN, 16058 was taken out!

  13. llerias7 says:

    Here it is the Int. III of major 5…oew1849 insight!

    • I still have 1768 as the bottom of intermediate iv of major 5 of PIII. Now, IMHO, the market is in intermediate v of major 5 of PIII to new ATHs IMHO.

      Btw, my SSTOs indicator already gave a buy-signal (on the DOW) yesterday (which I eluded to on Monday 12/17: http://soulsurferusa.wordpress.com/2013/12/17/ai-about-to-give-a-buy-signal-on-the-daily-dow/), and on the SPX today. I’ve learned not to trade against it and it’s -at least for me profitable- 8 to 9 out of 10 times.

      The bulls just did a 32 point move in a matter of minutes…

      • uncle10 says:

        Wow Soul. 80 to 90 percent profitable. You must be very rich! congrats!

        • Thanks uncle10! But, nope, I am not rich, otherwise I wouldn’t trade and work anymore… 😉 I am just a cautious trader and taking a lot of profits along the way. I also only use position sizes that I am comfortable with in the case I loose 5-10% based on my stop-loss level. NEVER use your entire portfolio for 1 position. Diversify! That’s IMHO key to increasing your trading portfolio size.

          And don’t try to hit that exact bottom or peak; ’cause you/we can’t (that’s for the big boys), e.g. today’s spike down to 1768 and then that massive spike back up. No way any of us mortals can catch that. I use OEW, classic TA and TIs to help me guide along the way. Always go for profits, don’t go for the top or bottom. Just be on the right side, and if you can ride 70-80% of an entire move you are doing mighty fine IMHO.

          I’ve only been trading since 2010, and much more actively since the 2011 low, I’ve taken a lot of beatings along the way. The first 1 year I was deep in the red, deep. The second year I was neutral and this year has been very profitable. Thanks to a large degree to Tony, and taking his lessons!

          Those beatings (I never paper traded, that’s BS, IMHO… since it won’t hurt ya when you go red; you just re-set and start over… well that’s NOT how the real-world is as you know) taught me some real good lessons. One of them is that there are only 2 types of traders: old traders and bold traders. There are NO old-bold traders.

          Those with all their stories about 100-1000s % of profits etc are the bold kind, and likely paper traders too for that matter…

          And when entering a trade the first thing you need to set is; what is my exit level BELOW my purchase price!?!? That’s the most important sell-price. THEN set your target price. Make it reasonable, use OEW, Fibs, TA, TIs and sell at the target. Oh it feels so good to make that profit. Nobody can ever take that away from ya! It’s yours to keep for ever. Then sit back, relax, and re-assess. You’ve made a profit and there’s always a next bus to catch! Patience = Fortune !!!

          To that extend, always use stop-losses and/or trailing stops. Profits are guaranteed.

          There’s a lot more to it IMHO (e.g. eat well, sleep well, be fit, be mentally ready, etc) and maybe one day I’ll write my trading strategy on my blog, so hopefully others can apply it too and become profitable.


          ps: sorry for the long story, but I felt I just had to share it

      • uncle10 says:

        ok. thanks.

    • Thomas Crown says:

      Int III or Int V of M5 ? We may be taking at least 50 SPX pts difference whether it’s one scenario or the other.

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