Thursday update

SHORT TERM: higher early then decline, DOW -196

Overnight the Asian markets ended mixed. Europe opened higher and gained 0.3%. US index futures were lower overnight. At 8:30 Q2 GDP was reported higher: 1.4% v 1.1%, and weekly jobless claims rose: 254K v 252K. The market opened three points below yesterday’s SPX 2171 close, then rose to 2173 by 10am. At 10am pending home sales were reported lower: -2.4% v 1.3%, and FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20160929a.htm. Then the market declined to SPX 2163 just past 11am and rallied to 2170 by 12:30. Then some negative news broke on Deutsche Bank and the market sold off to SPX 2145 by 2pm. After that there was a rally to SPX 2161, then a decline to 2151 to end the day.

For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 0.85%. Bonds added 3 ticks, Crude rose 60 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, then consumer sentiment at 10am.

The market opened slightly lower today, then hit SPX 2173. After a pullback the market started to rally, and then the DB news broke. The stock sold off and the market sold off with it. For the first time, since the SPX 2120 low and seven rallies, the SPX fully retraced one: 2152-2173-2145. Now it is quite clear, the entire advance off the SPX 2120 low is corrective. This suggests SPX 2120 was an A, and SPX 2180 was a B, with a C wave underway now. Would have taken this viewpoint earlier if it wasn’t for the ongoing uptrend in the NDX/NAZ indices. Cyclicals fighting the Tech advance. Short term support is now at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite oversold at today’s lows then bounced. Trade what’s in front of you!

MEDIUM TERM: potential uptrend looks corrective

LONG TERM: uptrend

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

About tony caldaro

Investor
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136 Responses to Thursday update

  1. learnedmylesson25 says:

    Foxnews says some DOJ announcement imminent.Market sees a 5.2 b fine as a plus.Probably wont hear anything until after 4pm EDT.What if its 8b?165 new highs 105 new lows–nasdaq.
    See how gold finishes…and how much volume.Down days in GDX with very low volume have been followed by big up moves.Later.

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  2. Very difficult to get a good read on this for short term traders. https://pbs.twimg.com/media/Ctn_XfVUIAAXxXJ.jpg:large

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  3. abchart says:

    SPX: hourly toping process here. No drop before Tuesday.

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  4. Techies sure don’t follow their own advice. the pattern is classic uptrend in a classic channel. Instead interpretations of head/shoulders, triangles, double triple tops, etc… Its like predetermining a football match and as the score is decidedly lopsided against you going into the 4th quarter you comment on all the reasons why it is wrong. The consumer is doing very well thank you and it shows. We are a service based nation and the consumer is the market. Look for reasons why the market did well over 7 years and find future breaks in that pattern instead of believing the past was a hoax. I saw this 6 years ago. The longer the zero rate policy holds the stronger the healing process. Housing prices are where today? Credit cost are where? Job growth? Wage exceeding inflation for how long now? All data from over one year back showed the continued healing process working. You had an extraordinary rare crash event that dropped to levels that screamed “BUYING OPPORTUNITY” had emotional bias been swept away. To suggest this long strong move is out of character begs the question from where did we start?

    October in third week should have a strong clue on quarterly earnings and future expectations. The fun could start then but unlikely before that time. 2250 seems a shoe in hit this year. BTW, I posted my Macro View over 6 years ago spelling out the long term consequence and suggested that while the consumer will be dealt the brunt of the pain corporate profits will do well and market was entering a very long bull run. I also spelled out the transitional phase where the reverse happens when the consumer gets the upper hand. This is not speculative thinking since most long term market cycles go thru these machinations.

    I will never change minds with my proclamations and really don’t care. As a system/application manager and programmer it’s in my DNA. Missed opportunities these last many years by the adamant bear. The bull should be equally shocked when the deep drops occur if you don’t stay nimble and let the data direct you without prejudice. Transitional phase should be upon us and as such higher volatility. My best guess is a decent breakdown in stocks for most of 2017 and a 20 plus drop from highs. not there yet since the earnings picture has not taken shape. If I am right 2017 will be dominated by the doom/gloomers. Oh what fun to once again declare all is not lost.

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    • AMZN was the stock to watch as it lead the way higher. Hit critical price and slammed down yesterday. Came back with a vengeance hitting new highs. Suggests we are in for more upside from here. Just my 6 years of bias views that the market seems to appreciate if no one else does (lol). How anyone can interpret the channel we are in as terminal is stretching the limits of plausibility. Stepping aside till some event or change in pattern develops. Cumulative Earnings should be the next market reaction. Dollar firm, oil holing up, gold sideways, and consumer reports are not even a concern these days since its boring but steady.

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  5. Peter Sliney says:

    Whether his direction and timing is right or wrong Newbie adds humor to an otherwise pretty dry atmosphere. Thanks Newbie and thanks Tony for sharing and hosting. Good weekend to all.

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  6. learnedmylesson25 says:

    Last one….new polls show Clinton bounce after debate.Gold (Trumpometer?)dropping as Trump drops.Just a theory.

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