tuesday update

SHORT TERM: rally continues, DOW +65

Overnight the Asian markets lost 0.3%. Europe opened higher and gained 1.4%. US index futures were flat to higher overnight, and at 9am the FHFA index was reported higher: +0.6% v +0.5%. The market opened three points above yesterday’s SPX 1872 close and continued to move higher. At 10am Existing home sales were reported lower: 4.59m v 4.60m. The opening rally continued throughout the day as the SPX rose with only two point pullbacks. By 2pm the market had hit SPX 1885, then it began to pullback. Heading into the close the SPX hit 1880 and closed there.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.90%. Bonds lost 2 ticks, Crude dropped $2.00, Gold slid $5, and the USD was lower. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: New home sales at 10am.

The market opened higher today, rallied to SPX 1885 with only 2 point pullbacks, then pulled back into the close. This has been one of the strongest rallies we have seen in a long time: a seventy-one point advance without a notable pullback. Both the SPX and DOW are getting close to confirming new uptrends. With the NDX/NAZ still about 4% below their bull market highs. This would suggest the SPX/DOW are likely tracking the count posted on the DOW charts, and not the diagonal on the SPX charts.

Short term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum blew right through yesterday’s negative divergence, hit extremely overbought today, then declined. The short term OEW carts remain positive with the reversal level now SPX 1865. Best to your trading!

MEDIUM TERM: uptrend probable

LONG TERM: bull market

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

About tony caldaro

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64 Responses to tuesday update

  1. ariez5 says:

    Anyone else have an opinion about gold here? I am very bullish. Today’s candle in GDX and overbought hourly RSI seem to confirm the 3-wave correction from March 14 is done, although GLD and SLV are lagging.


    • mjtplayer says:

      My 4th post, so I appologize.

      Gold is heading lower IMO. I’ve made several posts on gold and the weak/declining open interest on rallies, lousy volume on rallies, consistant “lower highs” and the underperformance of silver – which leads gold. Here’s more evidence of a weak gold market – the gold VIX:


      June gold VIX trading 17 – which is low, i.e. no fear. Also, large contango between the 2 front months = no fear. To trigger a low in gold, or any other market, yo need some level of fear i.e. capitulation. “Buy ’em when they’re cryin'”, with low/no fear, there’s nobody cryin’. You need to see a couple things in the gold VIX, first a rally in the front month to display some type of fear, not maybe fear in 3 or 5 months, fear now! That rally would ideally take the front month VIX above the 2nd month contract – moving the structure into backwardation. This would signal fear – now!

      Last spring, gold VIX spiked to 28 when gold first hit the $1,180 area – fear! The 2nd trip down in Dec the VIX rose to 23-ish, fear but not as much. Today, after dropping $100 from the recent rally high, gold VIX is just 17? No fear, need lower prices to strike more fear. 20+ in the gold VIX will be a good start, 23+ would be better.

      Secondly, you need to see open interest expand on rallies, and more volume on rallies. The rally we saw off the June low last year came with a 28 in gold VIX – fear! The greater the fear and capitulation, the greater the rally. Dec $1,180 re-test came on less fear, 23 in the gold VIX, thus less of a bounceback rally. Both rallies however had the same underlying problems: declining open interest (investors using the rallies to sell) and light volume, a hallmark of a short covering/oversold bounce, but not lasting long-term large buying positons.

      No fear here, need to see more:


  2. magnus1234 says:

    Boring, boring, boring. Not much of an analysis but boring means consolidation and the pull backs are still limitied. There must be one “bigger” one (say 15-20 handles) before I commit more money. Totaly flat at the moment.


  3. 777daimon says:

    from 1884 in continuous SPX (ES+margin = cash) we have A=C at C=1873/1874 area.
    I think that for the moment all we are seeing is just a waiting game before the important earnings afterhours.
    from the TA point of view a touch of upper daily BB is not something impossible in the 1897-1901 area the next 24-48 hours. I think that’s also Tony’s pivot there.
    the results afterhours might do the trick in spite of geo-political problems.
    true, news are already embedded in the price.
    sorry for 4th post today.


  4. lunker1 says:

    minor 1 added on Tony’s 60min INDU chart


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