tuesday update

SHORT TERM: lower early then rebound, DOW +10

Overnight the Asian markets lost 0.1%. European markets opened lower and lost 0.3%. US index futures were relatively flat overnight. The market opened three points below yesterday’s SPX 1845 close, then bounced to 1849 in the first few minutes. At 10am FED counsel Alvarez’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/alvarez20140408a.htm.  A pullback followed to a lower low at SPX 1837 by 10:30, and then the market started to rally. Just before 11:30 the SPX hit 1853, pulled back to 1848 just before noon, then headed higher. At 1:30 the SPX hit 1855, pulled back to 1848 by 2:30, bounced to 1854 by 3:30, then ended the day at 1852.

For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.85%. Bonds gained 5 ticks, Crude rallied $1.85, Gold rose $12, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Wholesale inventories at 10am, then the FOMC minutes at 2pm.

The market opened lower today, bounced, and then made a lower pullback low at SPX 1837. From the SPX 1897 high we counted five waves down to that low: 1854-1864-1841-1853-1837. This fifth wave could have ended the decline in possibly the form of a Minor 2 irregular  flat, or this is just the first part of a more complex C wave. There was a slight short term positive divergence at the lower low. And, the NDX/NAZ, leaders of the decline, are also displaying positive divergences from yesterday’s low. After the SPX 1837 low the market had its best rally of the entire decline – a positive. However, we would like to see the SPX clear the 1869 pivot to feel more confident that this decline is over. We suspect, as long as the NDX/NAZ hold their lows the SPX/DOW will resume their uptrend. Should the NDX/NAZ drop lower, the SPX/DOW will likely confirm downtrends of their own.

Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum rose from extremely oversold to just above neutral today. The short term OEW charts remain negative with the reversal level now at SPX 1863. Best to your trading!

MEDIUM TERM: uptrend weakened

LONG TERM: bull market

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

About tony caldaro

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145 Responses to tuesday update

  1. RDC says:

    I wonder what Dennis Gartman will say now?

  2. uncle10 says:

    Congrats to the buyers yesterday. That little spike below support and back up was the tell. Good short into the close here me thinks. gl

    • uncle10 says:

      all righty. back to all in short into the close at 1872.20. stop at 1882. see y’all on the other side. 😉

  3. This is it, we need another fraction of percent, back-testing now

  4. lunker1 says:

    Hi Tony does clearing the 1869 pivot mean 1870 or Does it mean 1869+7 = 1876+

  5. MasterCard $73.00 and rising! I’m sitting here at El Segundo Sol Mexican style cabana, across from Wynn Casino, Las Vegas! Just gave waitress, $20.00 tip after checking, MasterCard share price.. Only in its 17th trading hour, plenty more room to run higher.

    Go MasterCard! Still trading it,.. GL

  6. pimacanyon says:

    Hi Tony,

    When you say the reversal level is 1863, how do you use that data? Is there a range above and below 1863 (say plus or minus 8 points) that price would need to clear? When price clears 1863 (or 1863 plus 8 points), is that enough to turn the short term charts bullish or do you need a CLOSE above?


    • tony caldaro says:

      It is a simple level that helps define the smallest of waves.
      Often volatile during pullbacks and corrections.
      But pretty good during trends.

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