Tuesday update

SHORT TERM: flat opening then rally, DOW +24

Overnight the Asian markets lost 0.2%. Europe opened lower but gained 0.3%. US index futures were higher overnight. At 8:30 Q3 GDP was reported higher: 3.2% v 2.9%, and at 9am Case-Shiller was reported unchanged at 5.1%. The market opened 1 point below yesterday’s SPX 2202 close, bounced to 2204, then dipped to 2198 all in the first few minutes of trading. Then the market started to rally. At 10am consumer confidence was reported higher: 107.1 v 98.6. The rally continued until 2:30 when the SPX hit 2210. Then a pullback into the close ended the day at SPX 2205.

For the day the SPX/DOW gained 0.10%, and the NDX/NAZ gained 0.25%. Bonds gained 3 ticks, Crude dropped $1.85, Gold slid $5, and the USD was lower. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Tomorrow: the ADP at 8:15, personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, pending home sale at 10am, then the FED’s beige book at 2pm.

The market opened flat today, pulled back to SPX 2198, then moved higher for the rest of the day. The pullback, thus far, is only 15 points from the uptrend high at SPX 2213. If the market rallies to new highs the pullback will have been just another small retracement, in a series of small retracements, since this uptrend began. Thus far, as you have probably observed, this uptrend has been quite resilient. Short term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Short term momentum rebounded to around neutral after getting oversold. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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91 Responses to Tuesday update

  1. Jack Sparrow says:

    time to short oil around 52 (with a tight stop) and then go long after few dollars drop for a move upto 70

  2. Bud Fox says:

    RE GLD…Gold. Looking like a good buy right here, in GLD…that’s my view.

  3. gary61b says:

    ES looks to be forming a ED with a,b,c,d on my tick chart and one more push up to 2016 level would finish the look…. below 2199 and the deal is off.

  4. captbara says:

    Every index is doing something very different than one another. Very weird to see

    • johnnymagicmoney says:

      the sector rotation has been death for managed money. Trends don’t last long and they are violent and quick. Underneath the bleed up there has been constant damage and constant euphoria. Don’t know why people think this is a great sign.

  5. H D says:

    10 handle hit from the early morn high, opposite of yesterday. Heard a stat, Dec. has never been down 3 years in a row, ever. Down last 2 years. Ho ho ho

  6. vivelaamo says:

    Russel should hit the 18 day ema today or tomorrow. Time to start loading the Xmas longs.

  7. Personal income and outlays over last 2 months says it all. A huge gain of 1 percent in both spending and income over last 2 months. In fact the spending component has not yet exceeded the income growth. that tells you the consumer is not yet getting back to the old days of over spending.

    I believe that will happen but not before a wave 4 correction. Wave 5 will be something to behold. It should be one for the record books. getting ahead of myself so for now lets see if we stall early next year and fall some 20 percent in 2017.

  8. Looking at the Nasdaq…there are a lot of open gaps from July waiting at the bus stop to be picked up.Wonder if a few of them will be attended to on this -div.Lots of RSI problems developing from hourly to monthly.I know…could mean nothung,but going by the Brexit rally…could easily see 5000 or lower before the next upleg.Later.

  9. kingfrogcash says:

    Doug Kass suggesting an afternoon sell off on November high gainers to re-balance. I’ve heard of this at Qtr end, but not individual months.

  10. jobjas says:

    Crude completing wave 2 , target for wave 3 is $34

  11. captbara says:

    No oil talk today. Guess everyone missed this move?

  12. NINJA SHADE says:

    GM, still 3-wave action up and down so far, could be ED from 2198 yLOD, if we don’t break below 2203 today. If one more HH comes then I will be shorting it. Mindful of the big Bradley date range Nov 26-29 too

  13. Lee X says:

    Pivot time eh ?

  14. kvilia says:

    Learned, phil – still expecting gold to rebound?

  15. soulsurfer says:

    NASDAQ McClellan Oscillator went above 60: what does this mean short and long term?

    https://investingintelligent.com/2016/11/29/nasdaq-mcclellan-oscillator-went-above-60-what-does-this-mean-short-and-long-term/

    Free of charge, no need to sign up to read it, etc.

    Breadth picture fits with current count IMHO.

    Soul

  16. stormchaser80llc says:

    Not many changes today. The market is trying to find a footing for another leg up, with positive divergences again setting up on the hourly SPX. $VIX needs to put in new positive divergences on a new low. My proprietary Technicals model is retracing lower as well, but is still quite bullish. Breadth and % stocks above their major moving averages is still supportive of a run higher. My trading signals went from Bullish to Neutral Monday. Though it is quite interesting that my Ensemble of 999 members that I’m currently testing is 100% bullish still.

    More discussion and charts here: http://navigatethemarketstorm.com

    My site is 100% free. If you are visiting for the first time, be advised that I do ask new users register for a free login to see daily posts. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  17. bouraq says:

    Chart of the day is $EURUSD at http://www.tradingchannels.uk

  18. CB says:

    Some folks are getting a bit pessimistic at this juncture because of the monthly divergences..
    The chart is from : Elliott Wave Forecast.com (not a recommendation) http://elliottwave-forecast.com/stock-market/spx-and-the-presidential-cycles/

    Thanks Tony!

    • H D says:

      Hi CB, I know at least 1 other person who agree with that analysis.

      • CB says:

        Watching DJT is like watching CNBC, HD – the sound has to be off 😉 OK, but I watched the entire clip you’ve posted this time. First of all, it almost sounds like “the King of Debt” doesn’t like low interest rates…. weird, no? Btw, here’s how he did when he chose to finance his casino biz through junk bonds: http://screencast.com/t/4mB89hycVr0
        Also, he doesn’t like the fact that we’re in a “bubble”? Well, the repatriation of overseas profits he’s proposing would boost stock prices even more, but only temporarily, perhaps….

  19. locanbbs says:

    UPDATE: No comment!
    spx hourly futures –

  20. I have a question, when this market ends, what will be the cause? High PE, interest rates, war, I can’t figure it out. This market has risen on hope for better growth, 7-8 qtr not much, earnings, revenue GDP not good. No interest rates are going up and now that was a big concern, now it’s good news on hope of trump growth. We know we can have PE of 50 or higher 2001 dot com. Just not sure when and why market will go down. Keeps getting jacked up on hope, all tax cuts are going to do is allow for companies to buy more stock back, I guess that’s good. With 20 trillion in us debt, not sure trump can do what he thinks he can do, but guess if hope is all that is needed, realty doesn’t matter

    • Trump dumps the Fed?(Ron Paul suggestion btw).

      • dwr51 says:

        Do you really think we would have come out of the Great Recession in as good a shape as we did without the FED intervening. History is a great teacher if you are willing to read and understand it.
        Dave

        • I beleive they should of let the market crash. 4 trillion fed balance sheet 20 trillion us debt, and all we have is hope, we have a possibility of another 10 trillion in debt, with trump plans and interest rate hikes, if it doesn’t work it’s going to be worse, would rather of had in crash and already be over, but my question, was how does this end, either at sp 3500 or sp 2500. Is it unemployment at 2.5 percent GDP at 6 percent. Is it a fed mistake, I always thought Europe would bring us down,

          • tony caldaro says:

            In case you missed it we already had a crash.
            $20T in debt is about average compared to other country’s Debt/GDP.
            The FED could buy all that debt. But then we would have inflation and high interest rates.
            But the FED would collect all the interest and give it right back to the USG. The only ones that would suffer is the private sector. Not the gov’t.
            No matter how you look at it. If debt is interest-free it is not a burden.

            • purplember says:

              if Debts don’t matter, why all the fuss about tax rates and taxing the rich. why not lower taxes to 15% and who cares how much debt we run up.

            • yep I think I must have missed the crash, saw the one in 2002 and 2008 those were crashs. A 15 percent decline after a run up from 666 is not a crash. I hope your count is right and markets go up for the next 10 years. I doubt it goes higher then 2300 though.
              You bulls need me to short so you can keep making money. I see this ending early 1st qtr.
              Best of luck all

              • fionamargaret says:

                Maybe it will all end with the proverbial “winning, winning, all the time winning….we are going to get tired of winning”……..and with that, everyone goes short…..

          • Debt only matters when you can’t pay it back. The assumption is that government debt will be able to defer forever and still pay off its interest. Once good times take over it will spell the end of the debt game. that’s why most will never see it coming. AT zero rates in a deflation spiral there is no end game. Money looking for an investment home will gravitate to the least assumed gamble source, with the best return, the stock market. At zero rates the P/E ratio is in a normal range. Change that dynamics and money will find other sources. Accelerated spending and economy is exactly what will push us over the edge. If the last 7 years didn’t already prove this watch what happens when real rates rise. 200 basis point move should do it. This has been MY theory and 7 year assumption. Most huge reversals happen at extreme inflection points where everything look great on the surface. We are not there yet. Deflation helps defer debt problems. It will not take much in form of rate hikes to cause major problems. My theory has worked. I could be lucky and betting on a theory that is dead wrong but following coincidentally the true one. If wrong I will not see the end coming.

    • Almost every economic indicator is showing accelerated growth. The discretionary income I presented a year ago is now showing in the data on spending. Housing market keeps showing strength and that is the engine that is needed to sustain this move. The earnings portion is showing strong acceleration as well. It is “trying” to keep up with expectations. The market has been spot on and the argument from a year ago looks foolish in todays economy. The market didn’t just get lucky. Now that rates are rising it will actually be an added stimulus short term to lock in rates here. The desire or frustration over the market behavior should be an indication that emotional bias has no place in betting. You either try to understand the last 7 years and realize their long term view has worked or you continue to fight against market behavior.

      I have my macro theory and will continue to play against its assumptions till those assumptions fail. I see nothing out of sync with todays behavior. A wave 3 ending soon fits well with my model. A wave 4 drop based on disappointing earnings and higher costs also makes perfect sense. the fundamental picture aligns well with this also. the world frustration over the slow progress to bring back the economy of a decade ago is telling. Break for EU and now trump’s win suggests we will soon see the desired result. it will however be short lived. you can’t bring back the excesses this time around without major consequences. A debt implosion is inevitable given the geopolitical situation today. Giving the people what they want instead of what they need will have disastrous results. The roaring 20’s will be condensed into the roaring 2018-2019 and possibly 2020.

      Lets see if wave 4 happens soon. If it does I can be 90 percent confident on the next 3 years. BTW, 2240 looks better and better as the final top. If pattern of past hold true we should have bulk of upside move before December 10th.

      • tony caldaro says:

        bullish on the economy, but only seeing a 1% further rise in the market?

        • Absolutely! Corporations have to absorb higher dollar and higher cost structure with commodities and wages. Debt will become more expensive. In fact don’t be surprised if the Fed is forced to raise rates early in 2017. Consumer health I do see as sustainable all thru 2017. The baked in assumptions pre-election was for double digit earnings gains. this was way before the data confirmed the economic growth. P/E is stretched and they have to create that double digit gains just to hit expectations. Always look at relative growth to market expectations.

  21. Naz tried to ignore the -div,but finally caved in.More please.SPX can join in for 50 points or so.Gold can rise,dollar fall to 96.That’s all I want for Christmas…lol.

  22. Thanks Tony. I normally have a sense of what we might see, right or wrong, but at the moment I have more questions than answers. Said differently, clueless. With the recount underway, the looming Italian referendum and the OPEC meeting tomorrow, additional uncertainty has been introduced into the market as evidenced by minor spikes in VIX. We will get resolution on one of these issues tomorrow. The McClellan oscillator for the SPX is rolling over but remains positive while the summation index continues to increase; these work best when in synch. As I look at the charts we see flat averages, a new lower channel line and, possibly, an inverse head and shoulder formation which might serve to push the SPX over the 2110. Following that, the market will have a chance to deal with the pivot of 2212 and 2214, a level I believe could pose problems. Since the market often works in 3’s, a third failure at 2210 would not be constructive https://www.tradingview.com/x/lqoa2wDy/

  23. Thinking the Italian equity index had very good action today. A lot of bulls knocked out of the market over the last 2 years, referendum if it goes through will very positive, if no vote its status quo. Italians when polled don’t want to leave the EUR plus middle class and lower income workers have been protected from globalisation, so not angry as UK & US voters, looks like a great trade with Italian banks close to pricing in the worst.

  24. llerias7 says:

    Expecting a small C wave tomorrow on spx down to 2180´s…

  25. mjtplayer says:

    The much anticipated OPEC meeting is tomorrow, no deal expected, oil should continue lower on that news but it’s mostly priced-in. The $42 – $43 area is critical support and a possible neckline for a H&S pattern. If the H&S is confirmed, a test of the 2009 lows around $32/$33 would be the downside projection.

    https://www.tradingview.com/x/n1Yx3Z99/

  26. mtu MTU says:

    [EOD] Stocks –
    SPX short term tracking (Chart 1). Squiggle tracking is a high is in (Chart 2). See charts.
    http://market-timing-update.blogspot.com/2016/11/market-timing-update-112916.html

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