SHORT TERM: holiday volatility continues, DOW -154
Overnight all the Asian markets were lower, Hong Kong was down over 4% and Japan was over 3% lower. Europe opened lower, but rallied throughout the day to close +1.15%. US index futures were at one point down another 15 ES (SPX) points, but started to turnaround about 2:30 EST, chart below. At the open the SPX gapped down from wednesday’s close at 1110 to 1090, well above the overnight low of around 1070. The market quickly sold off for a few minutes to 1084, but then resumed the recovery from the overnight lows. By 11:00 the SPX had rallied back to 1099, quite a volatile holiday for US traders and the past two days worldwide. After a pullback to 1093 by 12:30, the market tried to rally into the close. The SPX hit 1098 in the closing minutes but turned over to close at 1091. For the day the SPX/DOW were -1.60%, and the NDX/NAZ were -1.65%. Bonds were up 20 ticks, Crude dropped $1.90, Gold lost $13.00, and the USD was higher. Support for the SPX drops to 1090 and then 1061, with resistance at 1107 and then 1133. Short term momentum was extremely oversold at the open and then rebounded during the day. This will be interesting week to review.
Wednesday night, while all US government agencies and broker/dealers were closed, ES (SPX) dropped 24 points on the Dubai debt news as markets sold off around the world. Bonds rallied 21 ticks, Crude lost $1.75 and Gold lost $4.00. Last night, after US government agencies and broker/dealers were reopened, around 2:30 AM EST the ES (SPX) was down an additional 15 points. Yet this time, Bonds were up, Crude was down an additional $4.50 and Gold was down $55.00. The USD, btw, was up about the same amount on both nights. Consider the variables between both nights and make your own decisions. Today’s trading found support within the range of the 1090 pivot. So no major damage done despite the holiday/overnight volatility. Will review everything over the weekend. Best to yours!
MEDIUM TERM: uptrend
LONG TERM: bear market rally
Enjoy the week all!
Welcome Cindy,"Consider the variables between both nights and make your own decisions". On both nights the USD rallied, SPX futures were down and Bonds were up.SPX futures were down more heavily on wednesday night (-24 vs.-14), and the USD was up about the same on both nights.Yet, when the US Primary broker/dealers were closed on wednesday night Gold was only off $4.00 and Crude $1.75.However, when they were open on thursday night Gold was off $55.00 and Crude $4.50 at the SPX worse levels (-14) of the day.The Primary dealers continue to manipulate the Gold and Crude markets on behalf of the President\’s Working Group.
Welcome Cooper,Agree HSI is very close to confirming a downtrend.Nice work Saulius.
Robert … SPX 1091.49
Thy fed and thy bankers have dna, thus explains -7600 points off DOW. Btw, another boom boom a comin. Default the name, downs the game, All in good time, all in good time. Debt started the slide, dept will finish the slide.Close thy account…. lol. Impulse,,hope,,delusion,,denile,,default,, realization= No way.
Does anyone know the correct close for the SPX? Some sources say 1091.49, others say 1087.27.The NYSE and Stockcharts have it at 1087.27, as does MSN Money.Yahoo Finance, CNBC, Bloomberg, my TDW website and others have it at 1091.49.
Props to Saulius J. for his labeling of HSI. A couple weeks ago it looked like this count wouldn\’t turn out. I thought it was risky and aggressive to label a very short, unextended wave III from 17.2K to 21.2K given an extended wave I and an ongoing V that was already complex.But so far wave III remains longer than V, just squeaking by, and that market looks in danger of entering downtrend. It looks like a most unusual wave since wave III is the shortest in length of time, and this makes the count especially prescient.
For that matter, November wuld end the month at 1111.
Bernie published a article on washington post, defeding the FED against the Audit bill. He claimed credit for the Stress Test having helped the bank, and the banking index exceeded the S&P. He claim audit the FED would cripple the economy. Sly Bernie, if he has given the TARP monies to the mortgagee, and not the bankers, things would have been different.Bernie hearing on 3 Dec. Be careful. What Tony is trying to say is: it was a low volume drop, volume increases on buying. Be careful, another short covering coming. The Squid may want to give Bernie a lift. If you are not comfortable with this, just shut down your account and walk away.
Cindy -I\’m with Tony\’s charting and with Bud in thinking that the market\’s put in the top for this larger wave. However, I have a slightly different take than Bud on Tony\’s comment. Whether or not Tony meant it this way, I think it appropriately reflected the need to manage money in a way that reflects the volatility of being simply close to a top. Chart-wise, use examples from the end of April and May. It would have been very easy to think we were at tops at those times, then if short, get taken out by higher highs before the larger move down nearly 2 months later. Money management is at least as much of trading as being right in reading tea leaves. After all, there\’re always possibilities for more than one count, so we need to be ever mindful of the alternate, as S2 did yesterday.
$NYA along with the #SPX amd $INDU are currently above their 20 MA averages. Now $RUT and $COMP are below their 20 MA averages.So we are getting a Mixed picture. Now Candelstick Analysis on $RUT http://www.americanbulls.com Is saying (HOLD) with caution alert that has one more day chance for Bullish outcome. In my honest opinion, I would be very alert to Bullish attack next week. This market is designed to cause the most pain to both sides. Bulls and Bears alike. $CPC closed at 1.05 reading on Friday. up 23.53% Dollar was up to 74.98 which is 1% gain. Out of all the Markets, Amex was down over 3%…. No market trades in exact straight line…. Volatility index is moving upwards….. so I\’m expecting some wild swings… I\’m only trading Apple and TZA…. Friday I saw no trade with TZA becuase the markets opened at their lows….. so I played the bounce with APPLE shares…. I pick Apple for many good reasons…. Its Fundamentals have been just awesome from the $85 levels… Business models with Mach computer is strong… Earnings for Christmas period are expected to beat last quarter earnings. Any weakness in Apple shares, I\’m buying to day trade it. Trading TZA is whole different animal…. You have to be very exact with trading any type ETF\’s… becuase of the slack…If I can make $.05 on TZA I\’m very happy with my trade…. where Apple I\’m happy with $.50 per trade or less. I try and make at least 40 trades per month. Each month we have 21 trading days. If you set your goal to make two trades per day…. thats 42 trades per month. If you make just $100 per trade, $100 times 40 = $4,000 Profit for the month.Thats my trading goals, to just capture some part of the daily movement. Elliott Wave OEW gives you huge edge, but you don\’t need to know Elliott Wave Theory to make money in trading. I use 1 minute time frame, along with MACD, RSI… along with the Elliott Wave pattern on different time frames… During the trading day, there will be 100\’s of chances to capture a trade. One of the best trading text book written in my opinion is (Aerodynamic Trading) by Mrs. Constance M. Brown. She is expericance Elliott Wave traders, she worked in the industry for many years. Goal setting, Psychological Tactics, and The Three selfes and Competition and Winning sections are worth the cost of her book alone. Intuition section is awesome… Courage to make the trade ect… The book is must for anyone who is dead serious about winning at this high stake game. She also talks about The Dark Side of Trading…. Fear of Success, Fear of Failure ect… The text book is 304 pages long. Its out of print, so you must search old books…. the books value has really increased. God bless and good luck trading..
Cindy….Hi….you have 2 questions. I do not think, it is correct of me to read Tonysmind, concerning his wording. Best, you ask him, directly via email. My ownread, was the there was a change in trend in 3 key markets. Oil/Gold had been goingup, now Gold down $55. Oil down sharply. The he covers the Bond market activiityHere too, an change in trend. The dollar drops to 74.22 and then experiences a suddenrally over 75.50. When you take the current OEW SP500 60 min chart, showing aB wave crest. I think, and I could be wrong. But, I read this as Tony is saying the market top from 3/9 is now in place. I made my own thoughts known about the same time. I also did it through and emailto my friends. With that said. I feel OEW is now saying the makret top is now in place.Vs the DJIA and the SP500. Hope, that helps a bit for ya.2nd question on Volume. This I can relate to very well…Note, the 11/23 vol highs,and then on 11/25 you can see the vol with a higher SP was actually on weaker vol.That is a Bear market signal, or warning. It is a negative for the market, and ties inwith the OEW postings on the SP 60min chart….Ok…hope that helps Cindy.The Ed Hadley 11/24 radio archive broadchast was I think, pretty good. yet very detailed.I had to several times replay what he was saying. since I am not a EW type. It ws extremelyinteresting, and I recommend all to listen to it….http://www.dcradio700.com/schedule.html
Don,,,,,thanks for the Hadley link. EDhadley while a bit quick in his EW depictioncovers it wll. Not, expecting his triangle wave pattern to evolve though, and he admitsthe fundamentals are not there. Later is not a quote, but in understanding of what Hadley said.Further, if the coming zig-zag up from 3/9 is acutally a 5 wave up, thenwe have a new Bull market. I leaned something there. I like that wisdom.It\’s all new stuff to me…Suggest those interested listen to 11/24 archive program.http://www.dcradio700.com/schedule.html
Forgot to add, what is the deal with the volume from Tony\’s chart, what is he trying to tell us.Sorry if this overlaps with the previous comment!
From Tony\’s post "Consider the variables between both nights and make your own decisions". Bud or anyone, could please tell me what Tony\’s comment is trying to tell a rookie like me? Is S2\’s comment about selling under the guile of the night right or does it mean the fed stepped in to save the day again or something totally else. A bit lost here and asking for help!ThanksCindy
Robert….we will know, in the fullness of time. I do not much care for Tim Woods work. Heard himseveral times on FSN. Hochberg, Wood, do not impress me. OEW does….Celente does.
No Name:I have read as well that the bull market ran from 1974 to 2007. Some assert the bull market ended in 2000, but Tim Wood does not feel that is the case. Going back to 1896, historically bear markets have lasted 1/3 the duration of bull markets, so this secular bear market should last until at least 2018.
WL…..Good questions, Tony will respond to your questions, I am sure.Best, you get the questions answered directly from him. If you do not,get a reply this weekend, then Sunday email him, directly.
Hello Tony,I think you have the correct count on the SPX. Placing the B at the exhaustion final tick fits the large rising wedge. Always excellant as usual. Cheers.
My 2 Cents…thought, I would add a brief comment. Expressing my views. Since,my views are at bit more negative. I see, the trend from 11/25 close as down.I see the 1110 close of the 25th as being it. Market top done. I do see techncial damagealready done, with the shorten session on Friday. Now, the SP needs only break the 1083support level. I am continuing my short TZA position. Thats all…..
Re-reading older posts I think I understand now that Tony is referencing a simple wave B, or the formation of a complex one. Since this may already be more clear to all of you, perhaps another commenter could confirm: Is it correct that "Bear Market Rally" is indicating Tony\’s preference for the more complex B, and an eventual double bottom?
Dear Tony,Back in October you changed your Long-term view from "Bear Market" to Bear Market Rally." The Uptrend later appeared to be in jeopardy and you switched back to "Bear Market," until the rally extended and it was back to "Bear Market Rally." I have been reading your site fairly regularly for quite some time and absolutely love how careful and thoughtful and thorough you are. Is it safe to assume that this change in phrase was intentional, and can you (or anyone else) comment on its significance for a long term outlook?Have a wonderful Weekend.WL
don, thanks for the handley link. I like the time and price relationship, Dow 10495 with 258 days, perfect so far. I think this wave down takes out the March Lows by quite a bit. I\’ll point out the charachter of the down waves we have had off the top, fast and very simple. If you look at Goldman Sachs from the october top this stock has declined in 9 out of 12 days down in W1, thats only 3 up days, meaning this is not a complex pattern. The same for the down waves in the Dow recently, very simple and quick. So I call these crash waves. One thing to watch is crashes are very rare but do happen when expectations change suddenly, and we do have a crash setup with this rising wedge.The other point I will make is since the March low some market leaders have bettered or equalled their 2000 and 2007 highs. Given the fundamentals present this suggests a that this wave up is actually Primary wave 2 in a 5 wave Primary C down.Another point is that this bear market should last longer than 2012. My guess is 2023 because I count 1974 to 2007 as the bull market which is 33 years,half that would suggest 16 years for this bear market. Sounds too bearish but Japan topped in 1990 and their bear market is still in progress. In fact the Federal Reserve is following the same path that Japan has. FWIW Cheers
Thanks Tony – hope you had a great Thanksgiving! As I follow this site over time, I\’m really impressed with Tony\’s scope of analysis and the thoughtful comments of others. I also listen regularly to another Elliottician, Ed Handley, who seems to be right on the same page as Tony through this period. Ed discusses the patterns and alternative counts in detail, providing reasons why the current count is of higher probability. The link to the broadcasts is: http://www.dcradio700.com/schedule.html Note that Handley\’s show only runs on Tuesdays and Thursdays and podcasts are archived for only one week. Handley\’s comments are useful along with Tony\’s dependable daily updates, thorough weekend synthesis, and great labeling of the charts.
The Russell did close at the low of the day!!
We also have a probe lower at 10,120 in last nights futures completing a 1 down and a abc retracement today. We will go down and test that 10,120 area. With all financials in a W3 and acting perfectly, any rally should be shorted. Good Luck.
Sounds like possibe institutional selling to me Tony under the guile of night with an intraday S&P cash bounce to keep the retail crowd in.Of course, I should have figured Mr. Market would close it right above Tony\’s pivot and in the 1092-1093 congestion area common for the last 2-3 weeks. 3 scenarios:1. It is possible that 1097.93 near 12:50 PM finished a 5-3-5 from 1084 but C=A*.36 is wimpy. Then again, we have 2 potential 5th wave failures short of 1114 so maybe that\’s the pattern near the top. That correction up would likely be a wave 2 of some degree due to the percent retrace and overlap. If so, SPX could trade a few points lower Monday morning and even test 1084 but we\’d likely get a mini wave 2 retrace of 1098 after that which would almost certainly reach a gap fill if not several points higher. So, with the exception of a new gap low, I\’d expect to be able to make a short entry at or above today\’s close. 2. It is also likely that the initial 5-wave bounce to 1099 was wave A with wave B still in progress having completed 2 of its 3 parts with various possibilities Monday morning to finish including a small impulse down, an EDT, a triangle etc. although the close at 1091.5 was about a 50% retrace of 1083.74–>1099.06 which is good enough for a B. If so, SPX should ultimately trade higher Monday and assuming the B wave ends at 1090ish, C=A just below Tony\’s 1107 pivot and C=A*.62 at a Fri/Mon double top 1099/1100.3. 1084–>1099 may have been a wave 1 of some degree in which case any bounce/reversal Monday should ultimately reach a new high.Putting it all together, Tony\’s 1090 and 1107 pivot force fields are CRITICAL and everything in between is an EW guess. That means a trade below 1083 supports a TOP and above 1114 supports a new rally to 1150+. Recent price action supports the 1083-1114 range, and the 20dSMA will reside at 1087+ on Monday. I think a strong gap down on Monday or bounce/reversal to 1091-1100 followed by a flat/red close would cause Dec 1st margin calls on longs exacerbating the down move. Likewise, going back to 1110+ would leave bears scrambling and caught with margin calls on any big downside bets today. I strongly favor the downside next week with with a probable but not guaranteed better entry on Monday, but Monday\’s action should guide us and waiting for a break of 1083 or 1114 would likely still get you several percent in either direction. Good luck.
We have a gap down from this rising wedge and looks to be a shortcover(phony) rally back up to attemt to fill some of these gaps, this is normal. The financials all closed on their lows. I look for a mini or maxi crash next week. Gold looks to be making a "B" top after a one down gap open. I expect the dollar carry trade will unwind as the markets are in the lead here. Cheers R.D.