SHORT TERM: stocks rally to start the holiday weekend
Overnight the Asian markets were mixed, but Europe came in slightly higher +0.10%. Stocks opened higher on overnight buying, and an oversold momentum reading entering yesterday’s close. Thus far, the rally looks fairly broadbased, as the market tries to recover from the whipsaw activity for the past few days. Bonds are up a few ticks, Crude is 65 cents higher, Gold is up $2.00, and the Euro is higher. The SPX has managed to rally back to 1515 this morning after hitting a low yesterday of 1505. Typically, presuming we are now in a downtrend, short term momentum will rally back to neutral before turning over again. The market is currently approaching that level. Yesterday’s selling broke through the rising trend line for the entire uptrend. That’s typically a technical failure. An attempt to retest that trendline often occurs before the market turns lower again. As I noted yesterday, if Major wave 4 is underway, the minimum expected decline would be a total retracement of this recent uptrend from the mid-March lows at SPX 1364 and DOW 11,940. The DOW will probably find support at that level, but the SPX will probably not. Most likely for the SPX is a retest of the long term EW pivot at 1316. A downtrend has not been confirmed yet. However, these will most likely be the downside targets if the correction is underway. Best to your trading!
MEDIUM TERM: neutral, targets hit
LONG TERM: bullish.
Hi Roger,
The potential diagonal triangle scenario was eliminated.
Even if the uptrend does continue, all I see is five waves up from the SPX 1491 low.
If the market holds 1491 next week, it\’s likely to extend.
Until next week … enjoy your weekend!
Hi Shaun,
The extent of the correction depends on the market.
I can only anticipate what will occur based upon technicals and OEW.
The last correction was small, but correct.
The market had a correction in early 2006, I\’m certain no one even noticed it when it occurred.
It was also a fourth wave, but of a lesser degree.
However, when the market topped in May 2006 and tanked.
I\’m just as certain, everyone scurried to find that little correction.
OEW never misses a wave of importance.
I may misread it at times, short term, but never medium term.
Still learning myself after nearly 25 years.
enjoy your weekend!
Hi Frank,
Yes the NDX should decline more than the others.
DOW – SPX – NDX increasing order.
Hi Bill,
Your welcome, and thanks to Greg inputs, always excellent.
Hi Frank,
Agree…from an OEW viewpoint, resistance is now at SPX 1522.
Enjoy your weekend!
hi Tony:
mkt tends to go up after holiday weekend..do you think we might test 1550 before we go back downagain..or you don\’t see any possibility of that happening?
we were initially talking about A B C D E waves in minor wave 5..do you think it has completed? what scenario would fit ..from 1532 to 1506.. BUT if it was then it was a pullback of 26 points..compared to B wave which was only 13points..do you think it was wave D? and now this could be wave E? thanks
and one more thing..have a great long weekend.
Roger
Hey Tony, If the SPX breaks 1491 then it is in a confirmed downtrend and wave 4 is under way??
hypothetical question? When it is confirmed that we are in wave 4 (down)— The SPX only went down some (maybe 3-5%) then started back up and went on to new highs would OEW be "wrong" or was "your count off" ? How confident are you that when we are in confirmed wave 4 SPX will go to 1364 area at least?
Thanks for all you do!!
Have a great weekend
Regards,
Shaun
Hi Tony,
Do you think NDX will drop (on percentage wise) as much as SPX or more when 4th wave unfold?
Interesting that Compx drop the most yesterday but today is quite strong against the other two (DOW and S&P). As of now, SPY already drop below today\’s low but QQQQ still only about half way down, not quite at the bottom yet. But on 5 day 15 minutes chart, throughout this first leg down, today S&P retraced about 50% of down leg while QQQQ only retrace about 38.2%. So maybe that\’s why QQQQ refuse to go down as much?
Frank
Greg and Tony, thanks for the detailed responses to my question on the last entry. Very much appreciated.
Hi Tony,
Wish you all the best. Ok, on the 15 minutes chart, it seems SPY and QQQQ just tested the neck line (which got broken yesterday) of that head and shoulder formation it formed past couple days (the double top being the head and the 2 spike on either side the shoulder, more obvious on SPY then QQQQ). Let\’s see if it can break back up the neck line, if it fail then I guess "look out below"…
Frank