friday update

SHORT TERM: new highs, DOW +42

Overnight the Asian markets lost 0.1%. Europe opened higher and gained 0.5%. US index futures were higher overnight, and at 8:30 Q3 GDP was reported at 4.1% v 3.6%. The market opened one point above yesterday’s SPX 1810 close and began to rally. Within the first few minutes of trading the SPX made a new high. Around 2:30 the SPX hit 1824, then pulled back to close at 1818.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +1.05%. Bonds gained 4 ticks, Crude added 10 cents, Gold rose $11, and the USD was lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Last night the FED reported a record low in the M1-multiplier: 0.697 v 0.709, and today the WLEI was reported lower: 52.1% v 52.8%.

The market opened quietly today, even after the good Q3 GDP final reading, and then started to rally. With nothing more than three point pullbacks along the way the SPX hit a new all time high at 1824. Thus far the rally, Int. iii as we are counting it, has risen 56 points in two days + two hours. During this rise there has only been one notable pullback, which occurred yesterday. The market entered the OEW 1828 pivot range today, and the 1841 pivot would be next.

Short term support is at SPX 1814 and the 1779 pivot, with resistance at the 1828 and 1841 pivots. Short term momentum is about as overbought as it ever gets before backing off towards neutral in the last hour of trading. The short term OEW charts remain positive with the reversal level now SPX 1803. Best to your holiday weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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32 Responses to friday update

  1. budfox9450 says:

    JCP – W2 low, looks ready to move higher….

  2. Jennifer says:

    Thanks Tony, and great weekend everyone!

    Wall Street closes high on GDP data:

  3. pooch77 says:

    R6 ru kidding me!!Excellent post,Merry Xmas

  4. Thanks for the update Tony! I decided to take some longs off the table a little before the close as the market was/is rather OB short term. With the holiday season upon us, and thus lots of family time coming up and thus much less time and especially desire to follow the markets, I figured I give my self an early present. Profit is profit! It’s been a nice ride since 1780 (when I went long); caught 25 points in less than a week. Also market is now at the 1.618x major 1 extension measured from major 2 (1822), and a pause and caution is likely warranted IMHO. In addition, the 1.764x extension of, what I’ve labeled as int. med. i (1729.88), measured from int. med. ii (1646.47) is at 1825. A retrace to the 1.618x extension (1811) is not unlikely before a possible move to the 2.000x extension at 1849 (upper limit of the 1841 OEW)…

    Happy holidays to you all, and if I don’t catch ya here before year’s end; happy new year!

  5. Have a good week end Tony.
    SEA broke out after 8 weeks of consolidation with huge volume confirming Tony’s analysis on BDI index that he published couple of weeks back. I still like XLF and I am long.
    EBAY is ready to move higher once it clears major resistance at 57.
    On a strong day like today FXI is down. Some thing is brewing in China???

    • tony caldaro says:

      China lost 5% this week

      • torehund says:

        Tony and all, I mentioned earlier a final bottom at 1500 for the Shanghai index was likely, and after that (month or so) the index surely hasn’t seemed to be very healthy.

        Maybe this washout will play out together with major four down ?

      • 16golfer says:

        I also heard there is trouble with the Chinese Banks. How will that affect us here?

      • torehund says:

        Golfer if there is a black swan lurking, it has to be China. But if we already know, its just a white one.

      • torehund says:

        But as a pupil on Tonys blog I also look around (no stone not lifted), and on the Shanghai index we can see wave 3 of 3 starting soon on the macd (wave 2 hocking down right now).
        Sure the price picture may initially be a bit sluggish, but then…..ok now you all know.

  6. bouraq says:

    Dollar rally not yet:

    • torehund says:

      The dollar has just GAPPED up from recent bottom in just two leaps, not the motive crawling that bulls for this currency was hoping for. It could go lower from here helping the stock rally and crush the yellow metal further.

  7. hucky2 says:

    The SPX bounce down from the 20 day Bollinger band today and the 50 day Bollinger band is just overhead at 1831. So probably limited upside for a few days.
    Likely to stay in Tony’s 1828 pivot range for now.

  8. kloutt says:

    peter ghostine called SPX1823

    awesome call regardless of how its done

    FWIW peter was calling this SPX1823 level for quite some time but has mentioned that SPX1844 is now a possibility

  9. radrian6 says:

    Hello all,
    Another expiration has come and gone and I’d like to offer some observations on the evolution of the RUT trading cycle and my expectations for the near future. I have posted a few times on the “shrinking” cycle phenomenon. This uptrend started with cycles that featured 12-13% rallies, 5.8-6.5% corrections, and durations of 46-48 trading days. Starting in September, the RUT cycle shrank to 27 trading days, a 7.8% rally and a 4.6% correction — those parameters were approximated in October but the cycle duration compressed further to 21 trading days.

    The November cycle maintained the cycle duration (23 days) but the rally phase stopped at 6.3% and the correction remained constant at 4.5%. Given the current parameters of the trading cycle, RUT has turned into a two-way street with traders making money from both sides. This is important to note for all of you that trade RUT-based products.

    What now? The rally phase of the last two cycles was 14-15 days and the consolidation/corrective phase was 7-8 days. If RUT repeats the 6.3% rally, the target for this cycle is 1169. The last three corrections have been 4.5%, 3.9%, and 4.6% — assuming RUT manages to hit 1169, the correction would be 46 to 53 points which will put the cycle bottom at 1123 to 1116. With regard to time, I would expect a cycle top in early January and a cycle bottom in the early part of January expiration week. I’ve accounted for the holidays but holiday trading is strange so the projected dates may be off a bit.

    RUT is being pushed hard today to a new high above 1147 — it’s meaningless but it gives the media something to talk about. RUT is now seven days into the rally phase and has arrived at the daily upper Bollinger Band and at natural chart resistance. It is likely that we will now see one to three days of consolidation before RUT begins the final upward push of this cycle. A consolidation at this point also allows the handle to form on the cup-with-handle pattern visible on the 60-min chart. Also, the intraday technical conditions are stretched so it’s probably time for a break.

    Keep in mind, the projection targets above are based on the RUT repeating the dimensions of the previous two cycles. In fact, RUT is giving up rally strength and/or cycle time with every new cycle so it may not reach 1169 or it may hit the top and/or bottom targets sooner than expected. Also keep in mind that traders have caught on to this cycle and are anxious to exploit it — as strong as this rally is on the way up, the correction is likely to be just as sharp on the way down.

  10. torehund says:

    Good weekend to all.

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