Thursday update

SHORT TERM: another gap opening, DOW +421

Overnight the Asian markets gained 1.8%. Europe opened higher and gained 2.7%. US index futures were sharply higher overnight. At 8:30 weekly jobless claims were reported lower: 289k v 294k. The market gapped up to SPX 2030 and continued to rally. The SPX had closed at 2013 yesterday. At 10am Leading indicators were reported higher: +0.6% v +0.9%, but the Philly FED was reported lower: 24.5 v 40.8. The market hit a high at SPX 2047 just past 10am, pulled back to 2033 just past 11am, then started to rally again. Heading into the close the SPX hit 2061 and closed there.

For the day the SPX/DOW were +2.40%, and the NDX/NAZ were +2.35%. Bonds lost 16 ticks, Crude dropped $1.65, Gold rose $8, and the USD was higher. Medium term support rises to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Options expiration Friday.

The market had another gap opening today for the ninth day in a row. The market gapped right over the 2019 pivot, which offered resistance yesterday. After hitting a high of SPX 2047, the market pulled back to 2033, and then rallied into the 2060’s. This rally, off of Tuesday’s SPX 1973 close, has already travelled nearly 4.5% higher in just two days. Quite an impressive move, clearly impulsive, and the best two day rally since early 2013.

We posted two potential counts yesterday: Major 4 still underway, and Minor 2 completed with Minor 3 underway. We favored the latter after observing yesterday’s five wave rally off the SPX 1973 low. Today’s action gives that count a higher probability. Should/when the market makes new highs that will be the preferred count. The recent 5.1% SPX correction appears too small to be of a Major wave degree. Short term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day extremely overbought. Tomorrow is options expiration Friday, best to your trading!

MEDIUM TERM: downtrend probably bottomed

LONG TERM: bull market


About tony caldaro

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209 Responses to Thursday update

  1. Walter Crane says:

    Thanks to the MM’s on PAOC, closed at 12.25. Man these guys have to start using another method on the otc…

  2. My Long term model is showing CRASH in next three months. Be aware that model has failure rate of 16% (back tested). Model is showing market will be off by about 320 points on SPX in about two weeks. Signal gets invalidated on 06th March.

    SPX should have blown past 2080 today, but it did not happen. So, I am inclined to believe that we may not see 2120 level (that I mentioned I heard a week before)

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