Wednesday update

SHORT TERM: another gap up rally, DOW +285

Last night FED governor Powell gave a speech: http://www.federalreserve.gov/newsevents/speech/powell20160628a.htm. Overnight the Asian markets gained 1.3%. Europe opened higher and gained 2.7%. US index futures were higher overnight. At 8:30 Personal income (+0.2% v +0.4%)/spending (+0.4% v +1.0%)were reported higher, and the PCE was reported higher: +0.2% v +0.2%. The market gapped up at the open to SPX 2055 and continued to rally. The SPX had closed at 2036 yesterday. At 10am Pending home sales were reported lower: -3.7% v +5.1%. By 12:30 the SPX had hit 2068. After a pullback to SPX 2063 just past 1pm the market moved even higher. Heading into the last hour of trading the SPX hit 2073, dipped to 2068, then closed at 2071.

For the day the SPX/DOW gained 1.65%, and the NDX/NAZ gained 1.80%. Bonds lost 15 ticks, Crude rose $1.45, Gold gained $5, and the USD was lower. Medium term support rises to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45. Today the Q2 GDP est. was raised: +2.7% v +2.6%.

The market gapped up at the open today for the second day in a row, after two successive gap down openings. With the SPX opening at 2055 it jumped right over the 2043 pivot, suggesting the rally would continue to the 2070 pivot. Which it did! What we have now is a two day 121 point decline (2113-1992), followed by a two day 61.8%+ retracement (1992-2073). With short term momentum hitting extremely overbought further upside should be limited to the 2070 pivot range, if not the 2085 pivot range. Then the market should pullback at least to the 2019 pivot, if not lower. Volatility continues. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: neutral

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

About tony caldaro

Investor
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480 Responses to Wednesday update

  1. phil1247 says:

    Tony

    despite the furious rally
    isnt it concerning that the daily macd spx
    is still on sell below the zero line ??

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  2. The symmetry was pretty amazing and the close near 2100 seals it for me.
    Even with the holiday coming up I see no way we end the day tomorrow on the upside. I am expecting a retrace of today move if not a little lower. If that were to happen I place very high odds of an even bigger drop on the 5th.

    The strangest thing about this whole thing is the July 5th reversal date I saw for many weeks now.
    The action is so close to new highs today we could go either way on July 5th. this means a rally to new highs and start of a big reversal after that day, or the complete opposite. based on other factors it seem pretty clear we will have the lows around that date.

    I always bring up alternative scenarios. I weight the options and place the odds. Still see 1950 or so as the lows next week. Need this long weekend to clear my head. Playing yet another one day move SPY PUT at 207.5

    Hope my market calls hold up a little longer.

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    • phil1247 says:

      holly …………

      ..good job !

      you are beating the daylights out of so called money managers

      keep up the good work…

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  3. hohoho598 says:

    Man I thought I did well with the Jan volatility, this last couple of weeks has been outstanding. Time to cash in to invest in something a bit more solid. GL Bulls, Yellen loves you…

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  4. 7dayyss says:

    Well, we started the month at 2097. What kind of monthly close are we going to have?!

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    • 7dayyss says:

      Maybe overbought, but don’t be surprised to be green tomorrow also. Holiday weekend, 1st of the month. Maybe a good time to try a short at the close tomorrow.

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