tuesday update

SHORT TERM: growth stocks still driving the market, DOW +91

After the close yesterday the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20140324b.htm.  Overnight the Asian markets lost 0.3%. European markets opened higher and gained 1.5%. US index futures were higher overnight, and at 9am Case-Shiller was reported lower: +13.2% v +13.4%, but FHFA prices were reported higher: +0.5% v +0.8%. The market gapped up at the open to SPX 1869, then moved up to 1872 just after 10am. The SPX had closed at 1857 yesterday. At 10am Consumer confidence was reported higher: 82.3 v 78.1, but New home sales were reported lower: 440k v 468k. The Growth indices then started to selloff again, and the market started to pullback. At 12:30 the SPX closed the opening gap by hitting 1856, but then began to rally. The rally took the SPX up to 1868 by 3:30, then it dipped to close at 1866.

For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.25%. Bonds dipped 2 ticks, Crude lost 35 cents, Gold added $2, and the USD was higher. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Durable goods orders at 8:30.

Reviewing the three major indices. The DOW is still below its December high, and has been quite choppy since late-February during this uptrend. The NAZ made a new high in early-March but has been heading lower ever since. The SPX made a new high in early-March, retested that high just last Friday, but has been choppy since early-March. The ingredients for the continuation of an uptrend? At this point, certainly not. A topping process in the cyclical indices while the growth indices head lower? At this point, certainly possible. We continue to closely monitor the NDX/NAZ while waiting for a sustainable upturn. Since last Friday, however, they have been solidly sold within the first hour of trading every day.

Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum hit overbought early, dipped to neutral, and ended in between. The short term OEW charts continue to vacillate with the reversal level now SPX 1865. Best to your trading this day traders market!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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82 Responses to tuesday update

  1. Market likely to gap down tomorrow 1840ish..Last eight minutes for BULLs to RUN for cover…It is either my 5000 on DOW or WARREN BUFFETT’S 100,000 on DOW. Old man said DOW will 100,000 in next about thirty years, so 7 times appreciation from present level. Buy with full hands, isn’t it? . GLTA.

  2. CygnetNoir says:

    $PLUG – I just bought me some $6.50 weekly puts to see if the lotto gaps down tomorrow. I hate buying ATM but they look too good here. Good times!

  3. H D says:

    1876 was symmetry C=A from 1850 21/21, SPX was almost -10 handles today at 1230, that rally failed. March started at 1840 pivot and looks like we may end there too. GL
    GO WILDCATS! See ya’s next week.

  4. blubrd67 says:

    Anyone with opinion on gold miners here? It seems to be in free fall.

  5. Sp500 STOCHASTIC bearish pattern! 1850 support on short term, Money Flow indicators are weak.

    Conclusion: SP 500 most likely will break 1850 support..


  6. JK1987 says:

    Cheap long 1857, all in.

  7. magnus1234 says:

    Heard from the ES trading pit that there were some bulk buyers (approx 2-3000 CARs) but now significant movment in price —> good supply. Why they buy is not important but no price movment is.

  8. Vix showing little concern about this drop . If it were at 20 I would be concerned as a bull but not here. VIX futures shows market will rally back

    • uncle10 says:

      You guys are a trip…. they move together. VIX futures aren’t telling you anymore or less than SP futures. LOL This really is my last comment about the beloved VIX. 🙂

  9. uncle10 says:

    Bonds are tight. Vix is tight. Yen is tight. SPX is tight. Something is going to happen soon. GL

  10. gary61b says:

    ES needs to take out 1869.5 before any further down…

  11. bobhopium says:

    i like the look of the Dow here @14402 …gonna try a small long (tight stop day-trade for now)…Gl to all.

  12. looks like it will be the usual 330 run up and slam volatility into the close

  13. mjtplayer says:

    The bond market isn’t fooled by the stock action, 10yr yields continue stay stubbornly low. Check out the TLT, on the verge of breaking out above $109 – $109.50 resistance? If so, the minimum upside projection is $113.50 – $114. That would fill the open gap at $112.11 with the 50% retracement and downtrend line off the highs the next upside target, both around $116 in the TLT.

    Lower rates ahead as the Fed tapers? Certainly looks like it, how many “experts” are calling for that? None. Coming into 2014, of the 16 “major investment houses” on wall street, all 16 forecasted higher rates and lower bond prices in 2014. If they’re all bearish bonds, who’s left to sell?

    FYI: A 50% retracement in the 10yr yield from the move up from 1.4% to 3% is 2.20%; 3.25% in the 30yr.

    • Kevin M says:

      End of the quarter games that’s all. If you make it more than that you are really being mislead by the media and dooms day fools.

      The real top will happen in mid to late April @1920ish for the spx. Right on cue for seasonality. Sell in May and go away will work nicely this year.

      Take care….

    • mjtplayer says:

      Not concerned about media or pundits, bullish or bearish; just reading the charts. The charts say bonds look strong and may want to break-out higher.

      US Dollar looks like it may be finding a low and the gold rally looks done, all signs pointing to deflationary pressures as the Fed exits QE. Only market to not confirm are US stocks, int’l and EM stocks are already a volitile mess.

      • simpleiam says:

        Oh yes, deflation it certainly is.

      • Kevin M says:

        No wave 4 this year to 1550-76 then wave 5 into 2015. Reason? Yellen will ramp up printing after this upcoming correction. She will have no choice. Look back and see every time they have stopped printing the market takes a dive. This year will be no different. The printing stops completely in the fall time frame.

        Be patient and buy the dip for easy money into 2015.

        Take care…

    • simpleiam says:

      mjt, I agree with same or lower rates, eventually. Fed can raise rates if they want, but will not be productive for middle-class. Think Fed I trying to move prospective homebuyers, etc. off the fence to purchase this Spring. Will see if the strategy works.

  14. mjtplayer says:

    Another day, another gap-up open that’s immediately sold; classic distribution pattern and topping action.

    When large investors/institutions want to unload stock, it takes time and they need to be careful not to overload the selling and cause prices to drop. So, one way to distribute stock is through ramming futures. You get a lot of leverage in the futures market: 10-1. So, it only takes $1 of capital to “buy” $10 worth of securities, this is why the futures are much, much easier to goose than the market itself.

    Institutions will buy/ramp the futures in the morning, causing the indicies to open gap-up higher, giving them more optimal prices in which to sell their actual stock holdings. This is why you get gap-up openings without follow through, the high of the day is literally the first few minutes at the open as stocks are immediately sold into the artificial higher open. This process goes on for weeks, which is why tops are processes, not spikes.

    They will hold-up the indicies through Monday, to not cause any large selloff before end of quarter window dressing. After Monday, look out below!

  15. magnus1234 says:

    Same story today as Fri,Mon, and Tue. Adv-Decl starting strong and then suddenly turns. Weakest are in order TF,NQ,ES,YM. Bonds and 10yrNotes “rallies” from there open. I believe 1875@SPX today is some kind of B. Looking to buy again @ 1840. I don’t dare to short.

  16. NYSE Head & Shoulder pattern on hourly time frame, over last seven trading days. Head 10,481.91 Transports today, weak. Double top on hourly?

    Next few days, crucial …

  17. sloop says:

    hows the weather in Russia Lee?

  18. buddyglove says:

    Thanks Tony, and “honorable mention” to all the other regular contributors here, who also give their time to help others.

  19. $Transport, 10 dma heading toward 20 dma… I’m pretty shocked $Nya, $Spx , $indu didn’t close lower today, due to 10 dma have crossed 20 dma .. I’m observing Wedge pattern.

    Next few days will be interesting.. GL

  20. Thanks Tony! Am engulfed in moving boxes, and have no internet at home for a few days, so I won’t be much around for the next few days till settled in my new place.

    For now: no key levels broken either up or down, market is racing back and forth: backing and filling for next leg up (bull-flag still in play) or it’s topping. Hopefully we’ll know before long…!

  21. bouraq says:

    Rising channels still in charge:

  22. radrian6 says:

    RUT support is holding near 1172 and there’s more at 1164 — that’s the good news for the bulls. The bad news for the bulls is the failed test of the daily Bollinger Band midline — that keeps a lid on the upside and maintains RUT status at neutral to bearish. The daily chart could be printing a large bull flag pattern that will ultimately break up. However, with the daily upper BB near 1213, the weekly upper BB near 1206, and firm resistance developing above 1205, the bulls will be struggling for a while.

  23. подветренный says:

    Thanks Homie

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