Friday update

SHORT TERM: gap down opening then choppy, DOW -252

Overnight the Asian markets lost 0.5%. Europe opened higher, but lost 0.6%. US index futures were lower overnight, and at 8:30 Q4 GDP was reported lower: +2.6% v +5.0%. The market gapped down at the open to SPX 2010, rallied to 2019 in the opening minutes, then headed lower. At 9:45 the Chicago PMI was reported higher: 59.4 v 58.3, then at 9:55 Consumer sentiment was reported lower: 98.1 v 98.2. The pullback continued until 11:30 when the SPX hit 2000. After that it rallied to SPX 2016 by 12:30, pulled back to 2005 by 1:30, rallied to 2023 by 2:30, then started to decline again. At 12:45 FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20150130a.htm. Heading into the close the SPX hit 1993, then bounced to close at 1995.

For the day the SPX/DOW were -1.35%, and the NDX/NAZ were -0.90%. Bonds gained 26 ticks, Crude rallied $3.05, Gold rose $27, and the USD was lower. Medium term support drops back to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Today the WLEI was reported higher: 45.7% v 45.0%.

The market gapped down at the open, rallied, then made a low at SPX 2000. After that it rallied in three waves to SPX 2023 before heading even lower into the close. Another choppy day while hitting the SPX 1988/1993 area for the fourth time this month. We have a lot to cover in the weekend update. But if you have been keeping track of the daily reports you should be fairly up to date. Best to your weekend!

MEDIUM TERM: downtrend

LONGN TERM: bull market

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

About tony caldaro

Investor
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52 Responses to Friday update

  1. ashram says:

    During the uptrend from the 2011 low, there have been five corrections larger than the current one. Each time, with the predictability of lemmings jumping off a cliff, the hysterics have emerged to declare a new bear market. With their Hindenburg Omens and convoluted wave counts, they have repeatedly managed to scare investors out of a participating in a historically powerful bull market, Each time they have been wrong, and each time they have shamelessly returned to be wrong yet again.

    The function of a bull market correction is to shake out those who are undercapitalized, weak-willed, or feeble-minded. The consolidation that began in December is succeeding beautifully. The hysterics are shrieking once more that a devastating bear market has arrived, yet a glance at the weekly chart reveals just a blip: a small pullback within a powerful uptrend with the primary trendline intact. This consolidation has been unusually volatile and complex, but in terms of amplitude it is just a normal pullback.

    The technical indicators which have produced hundred point SPX rallies for years identified the January 17 low, but this time the rally was only 75 points. Disappointing? Yes. Disastrous? That is wishful thinking on the part of those who are frequently wrong but never in doubt. The market is again approaching levels consistent with a significant low, so this is not exactly the optimal time to set your hair on fire and don your Robert Prechter mask.

    Unless…someone can construct a coherent EW count that identifies the December 2014 high as being the top of the bull market. Thus far, no one has met that challenge, or even come close. Lots of noise and chest-pounding from caterwauling dilettantes who view every pullback as the start of the Zombie Apochalypse, but we have witnessed their tired act countless times.

    This remains a bull market.

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  2. infantguru says:

    Just a thought:

    If Feb closing is historically to be worse than Jan’s, then next week bottoming is unlikely.
    It needs to go down significantly so even after the Feb rally, later in the month and going into March should still put Feb’s close worse than Jan’s by some…

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