SHORT TERM: options expiration pressures market, DOW -101
Overnight the Asian markets were mixed. Europe opened higher, but closed -1.35%. US index futures were lower overnight. At 8:30 the CPI was reported +0.1% v +0.3%, and at 9:15 Industrial production was reported +0.6% v +0.6%. The market opened slightly lower and continued lower. At 10:00 Consumer sentiment was reported at 72.8 v 72.5. The market continued lower after this report but the acceleration of the decline slowed down. Around 12:30 the SPX hit 1131, testing the OEW 1133 pivot. From an extremely oversold short term condition the market then tried to rally. Nearing the close the SPX had only rallied five points and closed at SPX 1136. For the day the SPX/DOW were -1.00%, and the NDX/NAZ were -1.20%. Bonds were up 16 ticks, Crude lost $1.50, Gold dropped $13.00, and the USD was higher. Support for the SPX remains at 1133 and then 1107, with resistance at 1168 and then 1179. Short term momentum was extremely oversold at the lows. Monday is a holiday in the US.
Lots of technical damage with today’s options expiration downdraft. The short term count made a slightly higher high yesterday, the rising SPX lower trendline was broken to the downside today, and that DOW ending diagonal looks complete. The short term charts, however, are not convincing yet, and the SPX 1150 high fell quite a few points short of the OEW 1168 range. Every uptrend since Oct 07, spare one, has ended within the +/- 7 point range of a long term OEW pivot. The one exception was the Nov 08-Jan 09 uptrend which ended 17 points under the pivot. Interesting, that this uptrend hit SPX 1150, 18 points under the pivot.
Upon closer examination of the short term charts we uncover another potential short term count for the entire rally from mid-Dec and SPX 1086. We have posted this count, in orange, on the SPX hourly chart. In order to get further confirmation of an uptrend top the SPX needs to break below the OEW 1133 pivot and head towards the 1107 pivot. If this rally has one more spurt in it, into the OEW 1168 pivot, it should hold the 1133 pivot and then make its run. This extended uptrend has been quite a challenge. Enjoy the extended weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market rally
i see what you mean … how about moving 1 to begin on nov 27, with the current 1 then being 1/3? there are a couple stocks i trade with few surprises and they are definitely at a point where 5 should begin. some of these stocks subdivided their A\’s, hence a clear c was observed. the bigger C\’s that now need 5ths have been tracking nicely. i moved out of the trades in the 3rd though for fear of truncation!
Welcome Spin,Have a hard time counting five waves between 1094 and 1150.This is one of the reasons I stretched out wave 3 to the second 1150.enjoy the weekend!
tony, what about 3 moved over to the first run at 1152 and the next peak/trough tracing a flat? this would be consistent with where many small-caps are, although it is difficult to rule out truncation at this point. the small-caps i study intensely are missing 5ths.
Hi Maurizio,That\’s usually what occurs, but not this time.
Amen, Roger. Now back to my cave :>
Cobalt, A east european hacked the GS trading software and was captured by the FBI within hours. The USGOV said the info around the case was of National security importance and was frozen by court order.Goldman,State Street,JPM, Duetche Bank,and Morgan Stanley trading desks work closely with the basement brigade at the NY FED.BTW M2 OWN rate dropped to .250 in the latest weekly report. Imagine a quarter basis point from ZERO and possibly just a week or two away from the China syndrome.
It certainly appears that 2010 to when If "We the public" ever correct the present dilemma. Investors will need to more cautious and more selective than any time in the past. The markets are going to fluctuate beyond anyones wildest dreams. Therefore, investors will need to maintain a steady perspective and beware of "News minutiae" Each and every day. Every critical financial story will break with Breaking News levels… and the implications of its details along with data will have to weighed. This will continue until the America public wakeups and demand "Enough is Enough" and presses Congress to take back the control of Monetary Policy from Elastic currency players Federal reserve and their central bankers. This all started with Republican Aldrich and his J.P. Morgon gang of bankers. Their secret Jekyll Island meetings to create central bank along with Federal reserve. Inflation is not the answer….We the public..demand demand responsible fiscal policy from our government. The Federal budget must be balanced or we the people are doomed to major depression. The Federal reserve admits, that dollar has lost 95% of its value from 1913. Americans wakup 95% value loss will not allow you to purchase very much. It will allow you to go into huge amount debt. EOS!
Yes, understand that Mr. Richard Fisher and co. are going to work at 3 am already……Did you know that the Fed now employs ca. 20 K people? Geez they must be posted on all the major trading floors around the world…
Thanks Cobalt,You would think maybe a combination of the two but 30 of the 38 Mondays were up and significantly so where most of the weekly gain occured on Monday. The S&P futures ramped up in the pre-market hours after Europe opened and especially when the NY trading desks opened at 4:00 am. Hmmmmmmmmm.Roger
Nice charts, Roger. Thanks. Not sure whether it is just shorts running scared or the little guy getting euphoric…:)
$DOW Lower trend line from Dec 18 low of 10,263.97 to Jan 4th low of 10423.21… Has been broken with Fridays low reading of 10,561.06… also observe the backtesting of the lower trend line… to 10,614.26$BTK gave a SELL Confirmed signal on Friday on the Candlestick Pattern. Biotechnology index is one of the first sectors to give sell confirmation. The major indexs SP 500 ect.. have SELL IF alert as of Friday. Tuesday trading is crucial. History 1929 period they experiance first stock market crash 1929.. The first of series of Banking system occured in 1930… there were three (3) banking crises during this period. The second banking crises unfolded in 1931.. Bottomline that history is teaching us is simple. Business cycles or the excesses that occur in good times of speculation or mismanagement during Republican policies of Free markets which produce corruption beyond anyones wildest dreams… can\’t be corrected by President Obama and his team in less than a year period. The damage that Ex-President Bush Jr. allowed to transpire is going to be liken to earthquake in Haiti . First shock wave….. we as Americans are already feeling… there another shock wave coming from free market principles. Free market vs Fair Trade Market.Odds are pointing to another down trend in the markets. Another banking crises has high odds if history repeats itself.
As I write this brief comment SP 500 "Dividend Yield" is at altime low of 1.79% Which means to me at least. There is better places to park money. Also, this economic contraction seems to be mild, brief recession, to main street media types CNBC business. But is it really the first phase of more serious contraction in a developing depression? Two words come to mind for me. 1. Obfuscation 2. Rationalization Real investors want one thing from any type of government. Its become extreamly clear in the past many years, there seems to be serious deperation on the part of those in power to avoid reporting any type of bad news which would tell the truth. This is also very true within the board rooms of corporate world. The core of the engine itself of high market valuation is linked to combination of mutual shared OPTIMISM. Example: Banking sector reporting os magical profits. Wall Street optimistic psychology of trying to brainwash the investing public into thinking thoughts that the Banking sector is turning the corner from 2008 fallout. When in truth! This is clearly false. This is serious form of Psychology of Academics called "Peppering the mass media" with articles from think tanks types who are either paid by Wall Street itself. To brainwash the public into Optimism that recovery is just around the corner. When in fact, its not. Its normal contraction in natural law. Boom times produce bust times ect. We just witness one of the greatest assets mania in real estate markets and stock market. Both segments are about 50% back to where they started in the mania phase. So, the next major trend maybe the slide of hope. Not just in Haiti with the natural law of earthquake blow they are experiancing after the mass media itself tried to promote before the earthquake Haiti was getting better. In my observations, the world markets are at crucial pivot point now. EOS!
Jman, Very nice. Noted your observation about the USD. I think you may be correct. We could hit some resistance at 78+/- and need something to jump start a move higher. Thanks
Tony, Your Nat Gas chart is very clearly marked. Some times you can\’t see the forest thru the trees. We could pull back a bit from here but well above the B. Thank you for the response.
$RUT topped on 1-11-2010 last 5 day of trading $Rut has went nowhere. Is it a set up for thrust down? Or setup for another wave up?
$SPX Primary uptrend line was broken today, So we can expect somekind of (reaction) off this trend line… Observing 30 minute and 15 minute charts, In my opinion, as Tony stated in his daily update,,any uptrend move is just a awesome point to add to my short positions. Everyone should know any type of waves..can extend. Thats why money management skills is so important.My new short position is not simple day trade. Its longer term trade. For at least 21 trading days to 34 trading days. If the market wants to move higher on Tuesday..thats fine.. I will just play the short side on day trade time frame.. on top of my longer term short position trade.
Mr. Jim Curry wrote an outstanding article on Cycle of 90 and 45 days. http://www.marketoracle.co.uk/Article16506.html
Elliot Wave International has concluded that this is the start of Primary Wave 3 down. Of course this is the proverbial "boy who cried wolf " situation as they have stated this a number of times before. I suppose this time \’they really mean it\’. Anyway FYI.
if for some reason clicking that link does not take you directly to the $VIX 30 minute chart, be sure to scroll down the page to it( or copy and paste the whole thing in the address window )
the recent divergences between the $VIX & $SPX as the highs and lows were made over the last week do a good job showing the caution in the market here, and the divergences are not as strong as they were in the previous consolidation phase around 1100http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3449922&cmd=show[s177779462]&disp=P
Tony, you are my preferred guidance, I\’m sure you are an honest and big hearted man, please next time avoid sentence like "Friday, btw, is Options expiration. Since we made a low early in the week we could rally into the expiration." My best consideration for you is unchanged. Best to your analysis.