SHORT TERM: market holds SPX 1261 pivot then rallies, DOW +32
Overnight the Asian markets were all lower, and Europe opened lower closing -2.10%. US index futures were lower overnight as well, and the market gapped down at the open hitting 1267 within the first few minutes. The SPX closed at 1280 yesterday. The market then rallied when at 10:00 ISM manufacturing was reported slightly positive at 50.2%, and construction spending eased only -0.4%. By 11:00 the rally closed the opening downside gap, but then the market turned over again. By 12:30 the SPX hit the OEW 1261 pivot, the low for the downtrend thus far. It then held support and rallied, exceeding the 11:00 (1283) high to 1285 by 3:00 and stayed positive into the close. For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.95%. Bonds were flat, Crude gained $1.40, Gold added $12.00 and the Euro was slightly higher. Support for the SPX remains at 1261 and then 1240, with resistance at 1287 and then 1316. Short term momentum turned higher after putting in a positive divergence, and the near term indicators edged higher as well. Tomorrow the ADP employment index at 8:30, and factory orders at 10:00.
Last week we mentioned, after the DOW broke to new bear market lows, that the SPX could test the Jan low at 1270, rally, and then near the Mar low at 1257, without exceeding it. This would put in a positive SPX/DOW divergence at the OEW 1261 pivot. This is exactly what has happened over the past few trading days. And today’s positive close, after posting a new low at 1267 this morning, then another low at 1261 this afternoon, is a positive sign. Should the SPX break through 1287 pivot tomorrow and hold that level as support. Then the downtrend could have very well ended today. Best to your trading!
MEDIUM TERM: downtrend hits 1261 support and rallies
LONG TERM: bear market
COMMENT
This friday the US celebrates the 232nd anniversary of the signing of the Declaration of Independance. This declaration was a direct result of our breaking away from the imperialism of England in the 18th century. For the next 200 years Americans fought wars to remain a sovereign nation, and for our allies, while still detesting imperialism. In recent decades, and especially this one, what we as a people have detested, our government has become. If this is what globalization represents, and what a new world order is all about. It’s time for a change in direction.
Thanks, Lee! Hope you do great too. Good luck!
Stu,
thanks for chart. question: can wave 4 be this way? I mean it undercuts wave 3 low? Looks like there is lots to EW than i thot.
It seems as though the Dow and SPX had a running flat and expanded flat respectively ending their wave 4s, however unlikely and atypical…it did seem like the best fit after crunching the wave counts yesterday. This end-of-day move sure looks and feels like a Wave 3. There\’s not been more than a 3-point bounce in wave 3 so it may only be half-done, but until Tuesday\’s low is breached, there is a glimmer of hope for bulls. Looks like oil may hit $145-150 after all and gold may reach near $956 before we can get a decent SPX bounce. Also, ISEE once again joined CPC in neutral sentiment territory…probably too many bulls buying dips expecting a bottom. My secondary bottom area at 1215-1230 should come into play if this wave 3 extends below 1256. As Frank suggests, I think the markets may be trying to go lower so they can get a decent .38-.5 Fib bounce back up to the 1974 and 1982 trend line breaks OR H&S area. A .38 Fib retrace of 13137–>10800 would land at 11,700 (the H&S area) while a .5 retrace of 13137–>10800 would equal 12000 (just below 1974 trend line), so 3-5% lower would be perfect and would equal 1200-1220 on SPX. Good luck.
My chart from yesterday still applies… http://www.flickr.com/photos/25052392@N05/2629332339/sizes/o/
1292–>1276=16 (i)
1276–>1285=9 (ii)
1285–>1259-1243=16-32 pts (iii)
Please describe "embedded STO". You got me interested.
i am sure long are pissing in their pants now…we are right at mar low, if job report bad tomorrow, we may just gap down and no turning back…
I probably shouldn\’t gloat about market going down. Rather scary.
ISEE above 100. vix back above 24, resistance now 30?
Would be sweet if oil goes to 150 pre 4th of July as a slap on the face of this country, it\’s people and the govt.Trichet, my man…be in history as the man that collapsed the global economy and caused a world wide stock market crash tomorrow.
Very nice day. Went short at 1280 today. Am still short at the close with a 1% trailing stop. Can Dow hold 11,000?
Buba,
see, embeded STO rules
LEH will pay 20% bonuses to all employees!
wow! how bad you had to screw up to not get a bonus?
wait til STO unembeds
Wow! someone is buying lottery tickets – $300 oil calls
trying long now.
suspect in custody buy em
L.A Airport closed for security reasons
Wow! Hydrogen cars so popular they even opened HydStation in LA!
They can fill up a whopping 7 cars per day!http://picasaweb.google.com/Slash850/TACharts/photo#5218490859856540242
I feel today is wave 4 high and with wave 5 to take out the Jan/Mar low for SPX…
-, yes, but we have to have all indices break Jan/Mar low before we come back… I just feel that wave 5 is not done yet… I think at the end of this run (wave \’a\’ for spx\’) should break all Jan/Mar low… have haven\’t gotten there yet… reversal is not confirmed yet… as you can see IWM reversal candlestick was a fake… today they took it down…
what reversal??
Frank
it\’s considered bad manners! We have to go back up , hug that 1974 trendline and "kiss goodbye"
All indicies look like no follow through… Especially QQQQ looks very weak… IWM made a lower low and has wipe out yesterday reversal candlestick… Lately QQQQ has outperform both DIA and SPY to the downside… I think this bounce just a reset for the indicies so the IWM,QQQQ and $DJT (transport) can catch up on the downside with other major indicies… Look at $DJT yesterday, what reversal??
THE next time you’re about to buy or sell a stock, you may first want to look up — at the moon.
http://www.nytimes.com/2006/11/19/business/yourmoney/19strat.html
Both studies agreed on a crucial point: during the 15 days of the lunar month closest to the new moon — starting seven days before it and ending seven days after — the stock market’s average returns are much higher than those of the other half of the month.
HD,
maybe waxing Uranus
"Cardinal PANIC Moon starts….You have no idea how dangerous trading this next few days is."
Amos? What\’s a cardinal PANIC Moon? Will I need any silver bullets?
Stu
I see banks $BKX broke 2002 support
do you think they could even sustain some sort of rally? or even lead un upcoming bounce?
unless they fall even lower in 2 days – so rally will be "kiss goodbye" back to resistance
today\’s action looks similar to yesterday\’s even STO looks similar
and price chart so far following similar pattern
Bush/Paulson is a good downtrend indicator.
)
Short at the start of the speach and cover at the end
Interestingly, SPX got the overlap I was watching this morning at 1291 but Dow did not. Admittedly, I\’m in a bit of a quandary about the count until SPX breaks above 1304 or below 1261. I\’m now watching the reaction near the SPX 1278 and Dow 11300 levels which are the wave 4 bottoms of previous degree. Much below that makes a bottom retest a strong possibility. In the Dow, I can count 5 waves down from today\’s high meaning we\’re likely in a wave 1 or A with at least a small bounce imminent. CPC is still neutral while ISEE has been edging more bearish each day.
Looks like a possible inverted H&S forming on SPX on 60 minute chart.
Stu,
STO got embedded again on 5 min chart
This should make everyone happy….making money.
LIMBAUGH SIGNS THROUGH 2016; $400M DEAL SHATTERS BROADCAST RECORDS
With cycle bottom fast approaching we left with only 2 days with no capitulation in sight.
Unless ECB crashes US market tomorrow or some even occurs over the weekend
Million dollar question: Will oil make one more wave up today and then break back down to its 20 or 50 sma over the next couple of trading days?
Gotta love this market. The whole world waits in baited breath for oil inventory numbers. Spike up, then down.
Amos u went 180 degrees a long time ago…but dang if u can\’t call em.
I went 180 degrees off of my plans and bought Apple shares at the open and sold the position at $177.20…for a very nice profit…I\’m on the sidelines now.
======
The violence, the first major attack in Jerusalem since March, wreaked havoc in the heart of downtown. Hundreds of people fled in panic through the streets as medics treated the wounded.
Three Palestinian militant groups took responsibility for the attack, but the claims could not be independently verified. Israeli police referred to the attacker as a "terrorist" acting on his own and said he was a bulldozer operator who worked in the area for a local construction firm.
Have a great and safe 4th of July….God bless Amos
Blah blah ….blah blah …blah…blah….zzzzzzzzzz….zzzzzzz…
back upstairs 2 day
Any ideas about the markets? we just touched Tonys pivot 1287
So Tony, saying you are off your meds is a personal attack huh? Man-up, let\’s go drink, shoot guns and get laid, LOL.Ole Alex in that safehaven article is off his meds too. I missed the part where we attacked Iran. Oh, since he saidit, he is assuming it WILL happen. News flash, Ole Alex doesn\’t know any more about what is going on than you or I. Anybody notice we have a Democratic controlled congress and every Democratic candidate is running as anti-war?. There has not been, nor will there be a US attack on Iran unless things change drastically.But, I agree with you – bring all our troops home from everywhere in the world, protect our borders, keep everyone out. Let\’em blow each other up if they want to, just mind our own business.Oil and stupid banks are crashing the economy. Historically, spikes in oil have caused recession or weakness. BTW, there is no shortage of oil, and the world is finding more all the time. Let\’s see what happens after China quits hording oil for the Olympics.Tony, no comment about my history lesson? Just a little whining about "personal attacks" (it helps the effect to say that with a whiny voice).I\’ll get back to you at year-end to see who is right. To the person who did not have the balls to identify them self: Millions killed in Iraq – LOL. You can choose to believe it without proof, doesn\’t make it true. Does it make you feel good to believe that millions have died in Iraq at the hands of your country? Does it matter that we are simply defending ourself there? Who knew the Iraqis would refuse to defend themselves against terrorist when we handed their country back to them. I agree, we should have. As Shakespeare said, "it was a grievious fault, and grievously hath he (we) answered it." Over & Out.
Hi no name, sorry I do no take any meds.
Clearly personal attacks are the modus operandi these days, to cloud the issues.
My Comments are there to provoke thought and discussion. Certainly I\’m not alone.
Received this last night by email: http://www.safehaven.com/article-10635.htm
SP 500 is currently in a Wave C up..
From 5-19-08 High 1440.24 to 6-17-08 High of 1366.59 is exactly 21 trading days….RSI (5) reading on 5-19 was only 75.37…
July 7, 2008 Monday will be exactly 34 trading days….
Hourly RSI (5) reading is HIGH 64.86
There is NO POSITIVE DIVERGENCE on the RSI (5) on the wave B on the Hourly chart…none…
Wave a is cmplete, wave b is complete and currently wave c is ongoing…and could end at any time…it may have about 4 trading left….July 2, 2008 Cardinal PANIC Moon starts….You have no idea how dangerous trading this next few days is.
Bear Market? or Bull market correction?
We have not yet corrected over 20%….its 19.89%
The amount of selling If we break support levels, will be huge…..panic…
I\’m looking to either go short the SP 500 soon..or go long dig If its breaks out above the upper channel.
God bless Amos
My 2 Cents……You have probably heard this before.
Peace, and freedom. Are not free.
Now, it is B wave up. Thanks Tony……..
Wow! my first sighting of Texas monkey
"That\’s because the big bully U.S. has been making the world safe for over fifty years now. Now, President Bush is trying that same little trick in Iraq "
Monkey, I feel like you watch too much FOX TV. After 5 years of war, over million Iraqis killed – YES KILLING INNOCENT PEOPLE IS MAKING WORLD SAFE!
I bet an Iraqi child whos parents were killed by US troops will be so happy to be friends with your children
your monkey business is not even funny
Tony please stay on your medication. Imperialism?? – The policy of extending the rule or authority of an empire or nation
over foreign countries, or of acquiring and holding colonies and
dependencies. Let\’s see kids, how may colonies can you count?Let me explain: Germany and Japan were warlike nations. We conquered them and then we stayed for a long, long time toteach them democracy, so we could all be safe and happy. Let\’s see kids, when did we leave Germany? What\’s that? Oh,we do? That\’s because the big bully U.S. has been making the world safe for over fifty years now. Now, President Bush istrying that same little trick in Iraq to make all our children and grandchildren, and their children safe.Is there a cost – yes. Would we exchange four or five hundred lives and several billion dollars for what happened in WWII? You damn right we would. Well, it could have been stopped at the beginning, but we didn\’t want to get involved. It\’s too hard. We learned our lesson. Now we make all the wars small ones.By the way Stu, in 1862 Napoleon III thought he would like to see Mexicans speaking French. Since the US was distracted by a little war of our own, he invaded. He was defeated May 5, 1862 (Cinco de Mayo), but that was just a smalltroop, he then sent 30,000 men and they captured the capital. After the Civil war, President Johnson sent an army under General Sheridan and chased the French out. In 1938, Mexican president Cardenas nationalized all US oil companies, giving them pennies on the dollar. They still collude with OPEC. In 1995 Clinton raised $50 billion to bail out the bankrupt Zedillo government in Mexico.Yeah, the US really SUCKS!
lol"If you got in five years ago you\’re starting to reach levels where you\’re going into the red. That\’s probably where we need to go a little bit before you get that kind of capitulation
I love my country and have visited dozens and still think America is the best overall, but in reference to Tony\’s comments about imperialism, the U.S. has not been too different from every other world power in history doing whatever it takes to maintain an edge in weapons and resources, enslaving many, taking land from native Americans, Mexicans and others as well as conducting a bad neighbor policy of assassinations and coups in Latin America, Russia, Cuba and many other places often times against democratic movements. I will agree those things are changing in this information and communication age and I\’ll agree that change is needed since the current government is abysmal…even though I voted for it. I think we should "shi* or get off the pot" to use a crude saying. In other words, we should admit why we really went to Iraq, take our share of the oil and destroy Iran\’s weapons capabilities (if true this time) OR admit we had no long-term plan to stay in Iraq and spend our money capturing Osama and other terrorists as well as making precision strikes. Peace would be great but the cost would likely be one world government with renewable resources for all…or maybe an alien attack like "Independence Day"…not likely anytime soon.
as far as crude goes….. i don\’t have a count but it looks to me like it has no room to go higher at this point and i expect a sell of to AT LEAST 135 and if 135 holds then a bounce to new highs…if 135 doesn\’t hold then a sell-off to 122
Sue,here is my SPX count: 1440–>1373 (1)
1373–>1410 (2) 1410 –> 1333 i of (3)1333 –> 1370 ii of (3)1370 –> 1307 iii of (3)1307 –> 1336 iv of (3)1336 –> 1261 v of (3)the numbers may vary from SPX values because i\’m looking at a futures chart…so i think today we have started wave (4) up. I would start getting bearish around 1304……. but i would be trading light and then add more if it moves higher.
3BEPb,
From what I read, Wave 5\’s are the most difficult to trade.
I find it interesting that according to my count, starting yesterday, Wave i started at 1289 finished at 1261. Today the rally could not close above 1289, and made a high of 1285. This is why I label it as Wave ii, and also why I think we see Wave iii tomorrow.
Even though I know oil inventories are going to come in higher, I don\’t expect oil to move much lower, because last week oil went down for about 30 minutes and then rallied the rest of the day. There\’s a lot of accumulation going on right now, I believe, in expectation of a big rally. The general public does not want to capitulate. Just my 2 cents.
http://www.flickr.com/photos/25052392@N05/2629332339/sizes/o/
I looked closely at the move up from 1272 and down from 1290. I find it near impossible to count 5 waves down to suggest the end of the down leg, nor do I see a 1-2-1-2 type situation due to the extent of the overlap. Instead, I\’m left with an expanded version of the running flat (3-3-5) that I proposed earlier today as Wave iv of 5 and thought had died at 1283. Since that pattern is rare (and not even used by some and used with varying rules by others) and since the likeliest target area for an extended 5th has already been reached at 1256-1272, I cannot give it great odds but it seems the best fit. Under this scenario, Wave iv of 5 has gone a touch over 2 days while Wave ii of 5 was a touch under 2 days AND wave iv (flat) alternates with wave ii (zigzag). Also, the sentiment I see most common is for a bounce around the Jan/Mar lows as we saw today with CPC neutral, although sentiment has been expecting a bounce for a week or two now so you could argue both ways. If this running flat is correct, the pattern could be complete or could need another small jig up. By all interpretations of running flats, C cannot exceed A, so any move to 1291 kills it. Above 1291, an expanded flat might normally be possible but typical projections would place C above 1304, which would violate the wave 3 low and thus eliminate the expanded flat pattern. If you believe the count that says SPX is beginning a larger Wave 4 correction, it would not be very symmetrical with previous corrections and it would likely travel near the wave 4 of lesser degree at 1367 which is almost indistinguishable from more likely B-wave projections.
So, here\’s my thinking. If SPX moves above 1291, it is likely in an 8-12 day B correction of 40-60% although 1304 is needed for final confirmation and it could retrace to 1287ish. If SPX moves below 1261, the correction obviously continues for a day or so and likely to 1215-1230 in capitulation although a truncated/failed 5th would be possible around 1256. If SPX drops early Wednesday, we need to see if it\’s a 3-wave move to 1272-1275 or a 5-wave move to determine what is likely to be breached first, 1261 or 1291. Good luck.
look at this CNBC headline:Why Won\’t the Stock market Panic Alreadyits like they\’re reading our forums……. lol
sue, it makes me very uncomfortable that someone from CNBC agrees with me….. because they\’re usually wrong. now i don\’t know what to think
3BEPb,
Fast Money\’s Guy Adami, agrees with you that Thursday we will get a 300 point rally. In watching some other traders it appears many have already gone long.
after carefully reading through comments on Monday\’s post, i can see that there is very bearish sentiment among you all at this point. everyone wants to see a capitulation……… things tend to change to the opposite side when everyone is sure of a certain outcome……. so i don\’t think another move down will start until we\’re all a little uncertain about the direction of the market.
Even Bill Gross from Pimco is now assuming Obama will be the next prez–calling him President Obama. It\’ll be a change for sure–lets all hope it\’s for the better.http://www.pimco.com/LeftNav/Featured+Market+Commentary/IO/2008/IO+July+2008.htm
Hi all,
I see today\’s action as Waves i & ii of 5 completed. tomorrow we see iii and iv, then thursday v (possibly an extended v). Good luck!
Yes, that llooks like; what has been happening.
Appreciate your thoughts….
the story of Dodd and with Spitzer it looks like a setup/retaliation from bankers.
Dodd is trying to push his people into Fed chairs. they(bankers) took Spitzer off and now every case he had against The Wall Street is dismissed or settled.
I red somewhere senators now open their own companies via their relatives/wives and appropriate big amounts of money to those companies. Looks like the mighty ship called "the USA" is sinking and everyone is trying to grab anything they can before we go down.
Cycle Pro, had a statement in June on his website. Given he
is not prone to political commentary. This one got my attention.
I thought, I might bounce it off this groups wide, and range of
minds here….Your thought\’s – what I was interested in.
——-
(Saturday June 21, 2008 PM): Before reading any further, please read this article by Karl Denninger, Did Bank Of America / CFC Write The Housing Bill? (dated Saturday 6/21/2008 10:08am)
Also please read the supporting article from National Review, NRO Doc Drop: BofA-Scripted Bank Bailout Looks Awfully Similar to Dodd-Drafted Housing Bill (dated Friday 6/20/2008 11:34pm).
This sort of thing happens quite often but the ramifications are not always as big as this. I know as fact that Enron routinely provided the write-up for Congressional bills related to US energy policy, energy trading, and derivative trading. Look where that got us (and Enron)!
I know this a quite a rant, but in my opinion this one is big, real big.
Make no mistake this is a bomb, a financial bomb, and every bit as potent as any nuclear device that could physically decimate an entire city or state. This bill is a cleverly veiled attack on the financial sovereignty of the United States. As such, it should be considered a treasonable act.
Apparently Bank of America/Countrywide Financial may not only have provided the write-up for the homeowner mortgage bailout bill, but some of the Congresspersons & Senators responsible for the bills introduction may have received illegal payoffs in the form of extra-special personal mortgage terms via Countrywide. Not necessarily in that order… the story of Dodd, et al getting V.I.P. mortgage terms has been out for quite some time already.
However, now we find out within the text of this bill that BAC may have written what amounts to a PUT option with a strike price of $300 billion. If this PUT goes in-the-money, we as taxpayers get stuck paying for it.
Frank any idea on captulation?
Tony,
Couldn\’t agree more about your paragraph under COMMENT.
And still doing a fine job nailing the turns on this downtrend.
charles1440-170*1.23=1230
)
1.23 and 1230 – got it?
last week\’s
Barclays warns of a financial storm as Federal Reserve\’s credibility crumbles
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml
AXP - Noted. heavy buying today.
Last Intermediate Wave A
1576
- 1406
= 170
Intermediate A now ?
1440
- 1261
= 179 (pretty close?)
Last Intermediate Wave B
1523
- 1406
= 117
Intermediate Wave B Target
1261
+ 117
= 1378