Wednesday update

SHORT TERM: gap up opening DOW 20K+, DOW +156

Overnight the Asian markets gained 1.1%. Europe opened higher and gained 1.0%. US index futures were much higher overnight, and at 9am the FHFA housing index was reported higher: 0.5% v 0.4%. The market gapped up at the open to SPX 2291 and continued to rally. The DOW opened over 20K and continued to rally as well. The rally continued throughout the day, with two 4 point pullbacks, until the SPX hit 2300. Then a dip into the close ended the day at SPX 2298.

For the day the SPX/DOW gained 0.80%, and the NDX/NAZ gained 1.00%. Bonds lost 13 ticks, Crude slid 35 cents, Gold dropped $9, and the USD was lower too. Medium term support now rises to the 2286 and 2270 pivots, with resistance at the 2321 pivot. Tomorrow: weekly jobless claims at 8:30, then leading indicators and new home sales at 10am.

The market gapped up at the open for the first time this week. We had a gap up opening on Friday that was sold within the opening minutes. After the opening the market continued to rally, with only two 4 point pullbacks, and hit SPX 2300 just before the close. New all-time highs today, and closing highs, in all four major indices. This is the first time both of these events have occurred together since mid-December. The uptrend may be extending after a period of sideways choppy consolidation. We are still holding to the possibility that this rally is a B wave that started at SPX 2234 (see SPX charts). The upside limit remains SPX 2305 for this scenario. Should the market exceed that level, then it is possible that Minute iii is underway (see DOW charts). Either way, it remains a bull market. Short term support is now at the OEW 2286 and 2270 pivots, with resistance at the 2321 pivot. Short term momentum remained pegged at extremely overbought all day, and now displays a slight negative divergence. 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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114 Responses to Wednesday update

  1. market has to close green, buy the close in anticipation of Microsoft and google. close at 2301. Im short, but market is crazy, wish for it to go up when I want it to go down. stuck all day in a 5 point range

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    • Dex T says:

      I shouldn’t bite but…

      Why does it have to close green? And why are you hoping it does if you are short???

      trying to MAKE a buck or LOSE a buck?

      Like

      • I wasn’t sure of my position being short into Friday. If it went up to 2301 I would of been stopped out. Market not doing anything but me in a situation I didn’t like. Go up so I can be stopped out or go down so I can make money. Now I’m at the will of after hours market with no control until the morning.

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  2. phil1247 says:

    out of all longs at 2298

    hasta la vista

    bay bee

    Like

  3. learnedmylesson25 says:

    “The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2016 is 2.9 percent on January 26, up from 2.8 percent on January 19. After this morning’s advance economic indicators release from the U.S. Census Bureau, the forecast of the contribution of inventory investment to fourth-quarter growth increased from 0.74 percentage points to 0.94 percentage points and the forecast of the contribution of net exports to growth decreased from -0.55 percentage points to -0.64 percentage points.”
    LML25:But a 10% drop in new houses doesn’t matter to GDP.Strange.
    Anyways,there was a slight +div on GDX that gave us this slight bounce.Nothing like the one on Jan 19th.TLT is driving it all right now.TLT has to hold above 118.80 or we probably nosedive again on both.A break of 22.50 on GDX kills the 20d and would be a lower low.Probably signal the end of the + weekly div rally.Good luck all.

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  4. phil1247 says:

    /ES

    first 15 min short from high hit target

    now dipping into ext long

    bearish below 2296

    looking to exit remaining longs

    Like

  5. ISINCODE says:

    Ok. I don’t have to be a market technician to understand that our new President will provide more support for the economy and the markets then the Fed did over the last 8 years. This article should provide any insight to what his focus will be and how he will continue to prop up this market throughout his entire term.

    http://www.nbcnews.com/business/markets/president-trump-dow-20k-i-m-very-proud-n712436

    I don’t need to count the squiggles because we are in for a long term ride and Tony’s main count (in a new BULL market) is the correct count. Go all in, Go to sleep and wake up in a couple of years and retire.

    Ok…some will say he cant control the markets? My bet he will.

    Best of luck to everyone !

    Thanks Tony for a great guide to the markets!

    Like

    • wildmarkets says:

      I hope all those steel and coal workers who are broke are investing in the markets as their boss says up up and up lol

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      • wildmarkets says:

        Those coal jobs are not coming back. So if the market is up into next election, same people who voted for their hope will vote for someone else coz of their same old empty pocket complaints. Typical human behavior who relies on others for their success. Same thing applies for us. We should not sleep and retire. Price action is the key and Fed policy is much more important than any President!

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        • Dex T says:

          It DOES matter when U.S. policies and regulations make certain industries so cost prohibitive and cumbersome that they are unable to compete . Many of the changes had zero do to with technological innovation but with political and corporate greed.

          The vast majority of people do not have the intelligence/skill set/financial means to make such easy shifts especially as they get older.

          The Fed has nothing to do with this.

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          • wildmarkets says:

            On one side you are telling Fed has pumped Trillions and on the other had you say FED has nothing to do. Go figure….. Regarding the Job market, humans need to evolve or get left behind. It has nothing to do with Regulations or Policies otherwise, we would be living in the stone ages! This is my last post for the day and no more economy/politics talks going forward.

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          • Dex T says:

            I meant the Fed has nothing to do with government regulations or policies like taxation, etc…

            The Fed has nothing to do with jobs being shipped overseas, or job creation. Of course regulations and policies matter! They play a huge part in decision making as to where to create jobs, invest in growth etc…

            People do evolve, but it’s a very slow and steady process.

            Like

    • captbara says:

      I watched the Trump interview last night. He calling for Tony’s count 🙂

      Like

    • Dex T says:

      The Fed dumped trillions via QE into the U.S. economy.

      Although I am a fan of Trump it will be really difficult for him to replicate that amount of savings anytime soon. There is A LOT of uncertainty in terms of costs and numbers.

      Like

    • vivelaamo says:

      The action since election suggest this is not far fetched as it sounds. Pbs will be very shallow for a very long time. In a few years we will look back at 20000 they way we now look back at 14000 area. Do I understand how this will happen? No. Do I really care? No. All a matter is I make money from it.

      Newbie remember this post to quote back to me a few years from now when your still calling for 1600.

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      • Dex T says:

        I doubt it will be that simple. Even in past few years we have had some strong drops. The market recovered but it has never gone straight up.

        Rising U.S. interest rates are going to be hitting the real estate markets pretty hard-at least in the bubble areas- NY, CA, FL, etc…

        Like

        • vivelaamo says:

          True but before the larger drops of 2015 and 16 we had plenty of choppiness before hand so enough warning. It’s not like it went straight up and then straight back down like bears seems to constantly suggest will happen.

          Like

  6. phil1247 says:

    /es

    short target and .50 support of 15 min ext long both at 2291

    if there is not a big bounce from there

    red flags are waving

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  7. purplember says:

    Tony, if SP breaks down thru 2286, SP count is likely. if SP breaks thru 2305, Dow count likely. is that correct ??

    Like

  8. phil1247 says:

    /ZB TLT

    bonds hit downside target

    out of all TBT …. for now

    Like

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