wednesday update

SHORT TERM: another wild FOMC day, DOW +293

Overnight the Asian markets gained 1.2%. Europe opened higher and gained 0.8%. US index futures were higher overnight. At 8:30 Building permits were reported lower: 1007k v 1034k, and we received three Housing start reports (latest first): 1091k v 899k v 873k v 891k. The market opened one point above yesterday’s 1781 close and continued higher until hitting 1785 around 10:30. Then it started to pullback. Around 1:30 the market came within one point of last week’s SPX 1772 low, then it started to rise heading into the FOMC statement:, and  economic update. Just before the statements the market rallied to SPX 1781. Then after the statements were released the market dropped to SPX 1768, rallied to 1795, then dropped again to 1785 by 2:30. At that time FED chairman Bernanke started his press conference and the market rose even higher. Heading into the close the SPX hit 1811, just three points below its all time high, and closed there.

For the day the SPX/DOW were +1.75%, and the NDX/NAZ were +1.15%. Bonds lost 12 ticks, Crude rose 45 cents, Gold slid $10, and the USD was higher. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: weekly Jobless claims at 8:30; then Existing home sales, the Philly FED and Leading indicators at 10am.

Important day! The market opened higher and then began to fade as if some knew tapering was on the way. About one half hour before the FOMC statement the market was within one point of last week’s SPX 1772 low. Then things really got wild as noted above. Preliminary analysis suggests the uptrend is in the process of extending. This suggests an Int. wave ii low may have occurred at today’s SPX 1768 low. Lots of technical and fundamental news to digest, and this will take a bit of time to work out. In the meantime, the medium term trend is still up and we are still in a bull market.

Short term support is at the 1779 pivot and SPX 1746, with resistance at SPX 1814 and the 1828 pivot. Short term momentum ended this wild day extremely overbought. The short term OEW charts are positive with the reversal level now SPX 1786. Best to your trading!

MEDIUM TERM: uptrend rebounding

LONG TERM: bull market


About tony caldaro

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168 Responses to wednesday update

  1. I think my New Years resolution is to discard all forms of T&A and charts / Elliot Wave. I think I am better off picking IBD stocks with darts I would have out made more money. I caught in the wave 4 trap at least 3 times this year and got hurt.

  2. jmoptions says:

    On the DOW, can a minor 4 overlap the b wave (15710) of minor 2 without overlap of minor 1? Looking at alternative count on the DOW chart. Thanks.

  3. kvilia says:

    I’m absolutely waiting for weekend update, meanwhile someone please explain the probability of end of int 5 of major V coinciding with gold reversal. Am I reading it correctly? I understand the bloggers are predominantly in favor of great January for gold but not sure if I can sense the timing consensus of end of Primary III. Thank you in advance for making me sleep well tonight 🙂

  4. mjtplayer says:


    If we are in the int v of major 5 count, then looking at the DOW we’ve put in minor 1, 2, 3 yesterday/today with 4 -5 still to come?

    Also, anyone else notice the DOW has made a new high, but no other index has

    • tony caldaro says:

      not my count, so can not answer that question

    • Thomas Crown says:

      Which btw is quite remarkable since SPX only needed, what, a couple of points ?
      Hard to read anything into this although this statement might qualify for the “famous last words” of this month if we start the P4 plunge from here !
      Then again, we are in a total dead calm now that the storm has passed and if the bulls don’t have the strength to raise SPX to a new high, yesterday’s euphoria will start to become even more suspicious.

      • tommyboys says:

        Today feels like a consolidation of yesterday’s big jump. This will burn off the overbought conditions. We could base for a few days or drop a bit I would think. Net-net this is bullish behavior IMHO…Time will tell. GLTA!

  5. llerias7 says:

    And I think they often keep the POMO $ and use it when they please…to do all sort of manip…

  6. hucky2 says:

    I think they spent today’s POMO money yesterday between 2 & 4pm

    • Thomas Crown says:

      Enough with this POMO thing ! Because the FED bought all the DOW stocks yesterday between 2 and 4, or they sent a memo to all the top money managers and asked them to kindly bid the DOW up after the statement ?

  7. gtoptions says:

    Thanks for the updated charts Tony. Definitely something to consider on a break of the highs.
    SPY ~ finding resistance at the Weekly R1.
    On a humorous note, the two headed Bernanke/Yellen monster has raised its arm to display a Peace sign. I have a wild imagination. 😉

  8. manunidhi21 says:

    Tony !
    Dow did 16177.
    The weak became strong.

  9. tuamotu says:

    VIX forming a hammer …
    SPX with a triple top …
    but the FED is there …

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