Tuesday update

SHORT TERM: gap up opening again. DOW +232

Overnight the Asian markets gained 1.1%. Europe opened higher and gained 0.2% after yesterday’s stellar performance. US index futures were higher overnight, and at 9am Case-Shiller was reported higher: 5.8% v 5.6%. The market gapped up at the open to SPX 2382 and continued to rally. The SPX had closed at 2374 yesterday. At 10am consumer confidence was reported lower: 120.6 v 124.9, and new home sales were reported higher: 621k v 587k. Just past 10am the SPX hit 2390 and began to pullback. At 12:30 the small pullback ended at 2386, then the market rose to 2392 by 3:30. After that a small pullback ended the day at SPX 2389.

For the day the SPX/DOW gained 0.85%, and the NDX/NAZ gained 0.70%. Bonds lost 15 ticks, Crude rose 50 cents, Gold dropped $12, and the USD was lower. Medium term support rises to the 2385 and 2336 pivots, with resistance at the 2411 and 2428 pivots.

The market gapped up at the open for the fifth time in the past seven trading days. With only one gap down opening during this period there is clearly lots of overnight buying. At today’s high the SPX hit the upper range of the 2385 pivot, before dipping into the close. Quite a rally to start the week – nearly 2%. While we were waiting for the NDX/NAZ to confirm a downtrend, before looking for a low in the SPX/DOW, the market took off to the upside. Clearly the NDX/NAZ November uptrend has extended as both indices are at new highs. This offers two possibilities. Either the NDX/NAZ are finishing off their uptrend, forcing the SPX/DOW into a larger than expected B wave. Or, the SPX/DOW have entered a new uptrend while the NDX/NAZ extends their uptrend. Either way it remains a bull market, and the short term trend remains up as long as Monday’s SPX 2369 low holds. Short term support is now at the 2385 pivot and SPX 2369, with resistance at SPX 2401 and the 2411 pivot. Short term momentum ended the day with another slight negative divergence. Best to your trading!

MEDIUM TERM: getting close to confirming an uptrend

LONG TERM: uptrend

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

About tony caldaro

Investor
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182 Responses to Tuesday update

  1. Ajay Singhi says:

    For the EW analysts, it’s better to track Dow and trade SPX from hereon as Dow is following a simple ABC pattern whereas SPX is in a complex triangle.

    100 pts down from the top already done on Dow. We just need another 100 or so tomorrow, followed by a recovery. If that happens, friday and/or Monday will be rocking for shorters.

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