tuesday update

SHORT TERM: gap down then big rally, DOW +101

Overnight the Asian markets lost 0.8%. Europe opened lower and lost 0.3%. US index futures were lower overnight, and at 8:30 the PPI was reported unchanged: 0.0% v +0.1%. The market gapped down at the open to SPX 1979, then immediately started to rally. After hitting SPX 1989 just before 10:30, it pulled back four points by 11:30, and then resumed the rally. At 1:30 the SPX hit 2002, then drifted lower into a 1999 close.

For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.85%. Bonds gained 2 ticks, Crude rallied $1.90, Gold added $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, the ECB starts their two day meeting, the NAHB index at 10am, then the FOMC statement at 2pm. With Friday’s OPEX, an interesting and potentially volatile three days ahead.

The market gapped down at the open today to SPX 1979, apparently completing the small ‘c’ wave we had been expecting from yesterday’s SPX 1987 high. While the decline was a bit smaller than expected, SPX 1973-ish, the ‘c’ wave apparently ended in a failure as it did not reach yesterday’s low of 1978. Nevertheless, the count we have been tracking appears complete: A 1990, B 2008, and then C (‘a’ 1991-2000-1983, ‘b’ 1997-1986-1998, ‘c’ 1978-1987-1979). This morning’s low should have concluded this somewhat complex a-b-c pullback.

During today’s rally, which is the strongest since the pullback began, the market broke out of a descending channel, the advance looked impulsive, and the laggard DOW made all time new highs. While we have placed a green Minor 2 label at today’s low on the SPX chart, we would like to see the SPX make new highs next to add confidence that an extension is underway. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2011 and the 2019 pivot. Short term momentum hit extremely overbought during today’s rally. Best to your FOMC trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

About tony caldaro

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171 Responses to tuesday update

  1. mrgreen2010 says:

    Looks like a fork is needed to see if done. This looks and feels like a fifth wave truncation…trades below todays lows in the indices tomorrow confirms. Might be a fast move in the Q’s below 98.95.

  2. wildmick says:

    if spx closes within a few points of 2011, its in perfect position to gap up over it on thur open. that’s what its been doing all along, so why stop now. will see.

    (have to check stocks couple times a day even if on vacation. I am among the truly addicted I suppose.)

  3. uncle10 says:

    10 down 20 up 10 down 20 up 10 down….. big boy market🙂

  4. Gary Lewis says:

    So it looks as if we are at that point where we buy a boatload of Jan 16 SPX calls, quit the job and take the wife on a world cruise. Think that it’s time that I quit my “put” addiction.😦

  5. gasman88 says:

    new all time high around the corner in an ever-extending 3rd wave

  6. gtoptions says:

    SPY ~ Bounced near WPP @ 199..63 ~ Stalled at WR2
    Next? Both DR2 & WR3 @ 202.28

  7. llerias7 says:

    Looking to 2150 on SP500 by Christmas!


  8. berniebaruch says:

    Longs, except for newbie, seems crowd.
    Cash and Happy.

  9. alexhartley1 says:

    Afternoon Soul – I think you had 2014-16 up next as a target? Does this still hold? Thanks, Alex

    I think the break of 2004 should lead to a break to new highs.

  10. Just got SPY 199 sept 26 expiry calls at 1.52 on that down spike. Yellen don’t say anything weird pls


  11. rc1269 says:

    if we’re lucky Yellen will discuss ‘price to equity’ ratios again today

  12. Tony,
    What do u think??
    is uptrend confirmed?

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