SHORT TERM: pullback continues, DOW -105
Overnight the Asian markets lost 0.2%. European markets opened lower bit gained 0.5%. US index futures were higher overnight. At 8:30 the CPI was reported higher: +0.2% v -0.7%, then at 9am FHFA housing prices were reported higher: +0.3% v +0.8%. The market opened one point below yesterday’s SPX 2104 close, then hit 2099 in the opening minutes. At 10am New home sales were reported at a seven year high: 539k v 481k. The market rallied to SPX 2108 by 11:30, but then pulled back again. At 2:30 the SPX hit 2094, bounced to 2099 just past 3pm, then closed at 2092.
For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.30%. Bonds gained 9 ticks, Crude was flat, Gold added $2, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Durable goods orders at 8:30.
The market opened slightly lower today, dipped below SPX 2100, rallied to 2108, then made a lower low at 2092. During the second decline the market triggered a Micro wave 4 underway, and we updated the hourly chart accordingly. The pullback from SPX 2115 looks like another abc (2099-2108-2092). Each of the previous three pullbacks during this rally have been between 21 and 25 points. This one is 23 points thus far. Today also marked the fifth consecutive week that the market has failed to rally two days in a row. This is quite odd considering the market has been in an uptrend since early February. And, it is probably the reason the market has not made much upside progress. Five week ago the SPX closed at 2100. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2107 and SPX 2115. Short term momentum ended the day quite oversold. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market
the ELLIOTT WAVE lives on 
Thanks Tony. As the market is correcting (I think it is just a correction on hourly chart) some leaders are breaking out. TWTR, FB, ITB etc… Some are still basing. AAPL, AMZN, BIDU, EBAY, AWAY will join the party soon.
Speaking of my entry into European stocks yesterday, they have started off on a right foot today. Another one (Italy etf- EWI) broke out of IHS and it might cross above 200 day SMA this week. Measured move has 15% upside potential from today’s price. EUFN (Europe Financials ETF) already broke out and also crossed above 200 day SMA. Greece wall of worry is back in the news. That means markets are going up. Good Luck All.
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Has anyone entertained the possibility that primary III on the S&P 500 ended in September of last year? The leg down into October was the A wave, the entire rally since is a B wave of an irregular flat, then a potential C wave down to come between say now and July that takes the index down to ~1750-1800. That ends primary IV and sets the stage for primary V into 2016-2017.
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I would say that if the market doesn’t get something going on the upside in the next week or so and the SPX fails to hold 2040 this is a possibility. For now I’m leaning bullish but this alternate scenario of an irregular flat above would explain a lot of stuff that hasn’t added up for me over the past 5 months or so. Would also note that starting on 1/1/14 the beginning of each quarter hasn’t been kind to the bulls. So what would make this April any different?
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Ryan, yours looks like a good alternative analysis. Any more, as the steam has gone out of the market at the turn into the New Year, it really doesn’t feel to me like it’s regained its footing. The FED did conclude QE, which drove this bull like nothing else. Yours could well be a serious view. Going forward, hopefully, as you also note, the market will offer us the key levels as clues.
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Today’s charts: http://www.tradingchannels.co.uk/2015/03/march-24-2015.html
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Thanks Bouraq.
Market has significant risk to the down side.
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Yes. For the last 3-4 years it’s been like that.
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Thanks Tony for the analysis!
Whilst our outlook for the US equity markets haven’t changed from the last time. Lets have a look at this interesting situation. A clinical stage biotech stock involved in the research and manufacturing of insulin drug for diabetic patient to be taken orally rather than through an injection. Stock is up 70% today? Whats happening?
http://marketchartpattern.com/stocks/oramed-pharmaceutical-inc-ormp-nasdaq-up-over-70-what-is-happening/
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mkt cap $86mn … was about $50mn before today
avg. vol. 54,000 shares … today 6.7mn
shares outstanding only 10mn, short int. 670k
biotechs look like the .com stocks on the late 1990’s
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The IBB holds 150 stocks
Of those 150 stocks, 89 have a market cap of $1b+
56 of those 89 (63%) have zero earnings
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lots of these in there
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Looks like a really great sport, but I am a brit from the shires of middle England so I have no idea what is going on. 🙂
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BG
A hail Mary is a pass and a prayer hoping to get lucky.
Some of these biotechs looked like they are driven by hopes and prayers =)
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still wondering what the news is? They were going to get the approval to start conducting phase b trials on the drug?
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Bubble or bubble: Fact is that most small cap bios were intrecepted between 1998 and 2002, (ipos and start up capial) plus burn-rate of 20-40 million annually for 10 – 15 years should place most of them just shy of 1 buillion each, break even. Then a mcap of 85 mill isnt a lot considering their potential earnings, that is if they are to become successfull 🙂
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Thanks Mr. Caldero. Those downside SPX targets of yours carried over from yesterday are looking good. Wednesdays have been interesting lately.
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US certainly underperforming
Must be Q1 earnings fears … find out next month
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Good point.
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Tony, Naz and Rut still holding up well.
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BDI still rising too
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Thanks Tony looks interesting from here on and the ATH so close.
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battle between growth and cyclicals
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Thanks Tony
L1 brought it up so if I’m wrong it’s his fault]
Looks like possible ABC up from 2040 to me ..just my silly opinion
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Even on the smaller time frames ..60 min- 5 min .I see a b c ‘s
Do I need a new set of bi focals ?
Thanks as always
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Lee X, I am sorry to inform you that you have finished quota of 3 posts within 20minutes of new post of Tony. I remember sometime before, I was too excited to trade early morning, and lost all monies in 20 minutes.
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Thanks for the heads-up, Lee You guys are good.
Thanks Tony.
spx daily : http://screencast.com/t/OtybLWp4dw3
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if we drop below 2081 you may be right Lee
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Hi Tony, why 2081? I thought you had 2081 as Minute 1 of Minor 3. If Minor 3 is done and this is Minor 4, isn’t it possible to see a low that doesn’t retrace below Minor 1 @2066? Obviously we’re near .38% of Minor 3 at today’s low so perhaps the correction is over. Gut says no. :o) I do see the possibility of an bigger ABC as Lee says. Thanks for any input. Leon
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Leon
2081 is the high of Micro 1
If M4 drops below it we have a problem
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OK think I see what count you have now as I just looked at your 60 min chart. You have 2115 as Micro 3, I thought perhaps it was Minute 3
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Mr. Caldaro,
If we drop below 2066, then that violates the rule about fourth waves overlapping the first wave, right? So, in that case, what would be the likely wave count?
Thanks!
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if we drop below 2081 that will occur
might consider the entire rally corrective then, might
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I would never have thought that the DOW would be down 100 pints and the VIX would be down.
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tells ya something about the VIX
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The VIX term structure is a bit puzzling, the spot VIX has been smashed but bounced up to 13.62 at the close, the April contract is trading out at 15.85 and the May contract at 17.45. That’s a very steep contango, it tells me there’s no fear in the very short term (which is typical with next week being holiday shorted), but looking out to next month and into May traders are certainly worried and buying protection.
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Tells of the complacency of the players…….imo
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Agreed
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SPX looks like a large diagonal
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Thx Tony. c=a 2092
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Cautious abc from 2040
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I agree L1
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2092 top of pivot support? Close below 2089 Thurs close = more cautious. 2081 is the micro 4 into 1. I see 5 up from 2041. The 62% is 2075. 2066 is the minute 4 into 1.
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2088 middle BB.
out 😎
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