Tuesday update

SHORT TERM: gap up opening fails, DOW -205

Overnight the Asian market were still lower -0.8%. Europe opened higher and rebounded +3.9%. US index futures were much higher overnight. At 9am Case-Shiller was reported higher: +5.0% v +4.9%, and FHFA housing prices were higher: +0.2% v +0.4%. The market gapped up at the opening to SPX 1928, then continued higher to 1941 just past 10am. The market had closed at SPX 1893 yesterday. At 10am New home sales were reported higher: 507k v 482k, and Consumer confidence was reported higher: 101.5 v 90.9. After a pullback to SPX 1926 by 10:30 the market rallied to 1948 by 11:30, then started to pullback. The market declined to SPX 1915 by 1:30. Then after a rally to 1930 just before 3pm, the market dropped 3% in the last hour of trading to SPX 1867, yesterday’s low, and closed at 1868.

For the day the SPX/DOW were -1.30%, and the NDX/NAZ were -0.50%. Bonds lost 25 ticks, Crude gained 65 cents, Gold dropped $13, and the USD was higher. Medium term support is now at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Durable goods at 8:30.

The market gapped up at the open for the first time since August 10th. In between those two gap up openings, were seven gap down openings in ten trading days. Quite an onslaught of overnight selling. Today’s market activity continued the feeding frenzy in the index futures. While the market did rally quite a bit from yesterday’s opening minutes low at SPX 1867. It was still quite a bit below Friday’s close at SPX 1971. And at the end of the day the market was back to that low.

The updated count, as noted yesterday, suggests the SPX is in Major C of Primary IV. Major A having occurred in July at SPX 2044, and Major B also in July at SPX 2133. Support for Major C should occur between the OEW 1828-1841-1869 pivots. Thus far it appears Intermediate A declined to SPX 2052, Int. B rallied to SPX 2103, and Int. C is still underway. Within Int. C we are counting Monday’s SPX 1867 low as Minor A, and the rally to SPX 1954 as Minor B, with Minor C already retesting the lows. Once Minor C concludes it should end Primary wave IV. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum only managed to get back to neutral then ended the day quite oversold. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bullish

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

About tony caldaro

Investor
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323 Responses to Tuesday update

  1. fotis2 says:

    3up 3down 3up on 30min but not good at waves.

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  2. Dex T says:

    These huge price swings continue to look more and more like a bear market.

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  3. 1950 short the close?

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  4. Gary Lewis says:

    Well, I bought some calls at 190 (SPY) but on the hourly chart, it still looks just like some sideways consolidation. In the end, I’m well positioned to the upside and the downside. As long as volatility remains high, I’m make some money. Still looking for lower prices But I’ve been disappointed too many times in the past. As long as it goes up AND down, I’m a happy trader. I hate one way markets.

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  5. nardobeme says:

    I’ll say this, Sibyn should receive credit for his projection. He called the 1830’s months in advance with his BART. Everyone thought he was bonkers. Sibyn recently suggested a quick jaunt to 210 (?). Sibyn, are you around?

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