Wednesday update

SHORT TERM: FOMC volatility, DOW -75

Overnight the Asian markets lost 0.4%. Europe opened higher but dropped 2.3%. US index futures were lower overnight, and at 8:30 Q1 GDP was reported lower than expected: +0.2% v +2.2%. The market gapped down at the open to SPX 2107, bounced to 2113 in the opening minutes, then dropped to 2103 just past 10am. The market had closed at SPX 2115 yesterday. Also at 10am Pending home sales were reported lower: +1.1% v +3.1%. After a rally to SPX 2111 by 11am, then market dropped to 2097 by 12:30. Then the market started to drift higher awaiting the FOMC statement at 2pm: After its release the market hit SPX 2109, dipped to 2102, and then moved higher. The gyrations continued as the SPX hit 2114 by 2:30, 2105 just past 3pm, 2111 soon after, then closed at 2107.

For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.60%. Bonds lost 17 ticks, Crude rallied $1.45, Gold slid $8, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims, Personal income/spending, PCE prices and a speech from FED governor Tarullo at 8:30, then the Chicago PMI at 9:45.

The market gapped down at the open today, then after bouncing around it sold off to SPX 2097. Just two points above yesterday’s SPX 2095 low. After that the market rallied back, mostly after the FOMC statement, to nearly close the opening gap when hitting SPX 2114. From last week’s SPX 2072 low the market continues to look sloppy. We have had a three wave rally: 2110-2091-2126, then a choppy decline: 2095-2116-2097-2114. This does not look impulsive. However, to the uptrend’s credit, the entire rally from the end of March SPX 2046 low has remained in an upward channel. We posted this channel on the hourly chart. Short term support remains at SPX 2095 and the 2085 pivot, with resistance at the 2131 and 2198 pivots. Short term momentum hit quite oversold this morning, then bounced back to neutral again. Best to your trading this day traders market!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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131 Responses to Wednesday update

  1. sloop says:

    nice support in the 80 area

  2. H D says:

    Tony, does the DOW have the best elliot wave pattern?

  3. lunker1 says:

    and kiss the 2085 pivot goodbye?

  4. Page says:

    The pullback is over. Time to go long. Extremely oversold.

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