SHORT TERM: yesterday’s spike up rally continues, DOW +131
Overnight the Asian markets were mixed. Europe opened higher and closed a stunning +4.05%. It has been quite volatile and closed +4.65% last tuesday. US index futures were higher to flat overnight. At 8:15 the ADP index was reported unchanged: +91K vs +91K. The market opened slightly lower at SPX 1122 and dipped to 1116 in the first few minutes. The market had closed at SPX 1124 yesterday. As the market started to move up from that low, ISM services was reported higher than expected, but still lower: 53.0 vs 53.3. The market continued its rally until about 11:00 when the SPX hit 1134. For the next two hours the market bounced around a bit and drifted lower to SPX 1125 by 1:00. Then it started to rally again. Heading into the close the SPX hit 1146 by 3:30 and ended the day at 1144.
For the day the SPX/DOW were +1.50%, and the NDX/NAZ were +2.40%. Bonds lost 25 ticks, Crude rallied $4.05, Gold added $14.00, and the USD was lower. Support for the SPX moves up to 1136 and then 1107, with resistance at 1146 and then 1168. Short term momentum remains at slightly overbought after hitting extremely oversold yesterday. Tomorrow, weekly Jobless claims at 8:30.
The market opened flat and then resumed yesterday’s last hour rally. With the SPX +6.6% in less than two days, there are several alternate counts being kicked around in OEW land, and by the commenters in this blog. The most popular one is that the market is following the Oct07-Mar08 decline, with five waves completed into yesterday’s low. The similarites are striking, and the count has been carried as an alternate count, with an unconfirmed uptrend, on the DOW charts. This suggests the market could rally, in an uptrend, for a month or two, to levels slightly above the previous uptrend high. Then, most would probably expect the bottom to fall out once again, i.e. May08-Mar09.
For now we continue to maintain the count we have been tracking on the SPX charts. Although today’s session high came quite close to overlapping our Minor wave 1 low at SPX 1150. Should this occur we’re probably going to experience another choppy market, with an upside bias, for a while. Short term support is at the OEW 1136 pivot, the low 1120′s and then the 1107 pivot. Short term resistance is right where the market ended the day, the 1146 pivot, the mid-1150′s then the 1168 pivot. The market ended the day slightly overbought. Best to your trading!
MEDIUM TERM: downtrend low at SPX 1075
LONG TERM: bear market highly probable
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
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Hi Tony
Thank you
I found it on this link http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987&cmd=showe178870501&disp=O on the 8th page. Again I was saying there aren’t 5 waves on this chart so this would mean the FTSE would need to make a lower low before resuming it’s uptrend?
Just wondering what your take on this was? I’ll check the other indices for a bit of guidance…
Sorry to keep posting new threads but I can’t seem to reply on the thread when logged in by facebook.
Best wishes
Sarah
Hi Sarah, The thread is not a problem.Alistair covers the FTSE but has been having internet problems recently.Yes, there are five waves down from the February high.The fifth wave is not confirmed as being over just yet.
Apologies your ftse chart isn’t labelled, I presumed you were looking at
Wave 1 = 6105.77 – 5591.59
Wave 2 = 5591.59 – 6100.47
Wave 3 = 6100.47 – 5644.38
Wave 4 = 5644.38 – 6084.08
Wave 5 = 6084.08 – 4791.01
Do you have a chart with labels?
Best wishes and thanks again for your insight…
Hi Sarah, The labels did not appear with the links?That’s not how we counted it.Use this link:http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987&cmd=shows67317693&disp=O
Tony,
Thanks for your reply. I was away, hence I couldn’t get back to ya immediately. You had earlier mentioned the possibility of an uptrend to SPX 1223-1258 once confirmed.
Would you be kind enough to explain what will confirm the upside to 1223 and beyond. TIA.
Hi Kling, OEW confirms uptrends and downtrends.We just report what we believe is transpiring and then wait for confirmation.
Thanks for the insight Tony. (couldn’t respond on the post for some reason) Maybe I’m applying the rules a little too loosely.
1 more wave up before jobs number..why I sold
http://www.wavegenius.com/2011/10/06/203pm-elliott-wave-midday-update-video-for-10-06-11-worried-about-jobs-number-squared-positions/
Tony, thanks for your invaluable service. I find your analysis very beneficial. I’m wondering what you think about the current S&P action being an irregular flat, with W-A being around the Sept. 20 highs, W-B the 10/4 lows, and we’re currently in sub-W-1 of C? (Credit where it’s due, not my original idea, saw it on Sid’s site)
Welcome Steven, The market did an uptrend into the price high of SPX 1231.Then entered a downtrend into the recent low of 1075.It would be odd, to say the least, for the downtrend to be part of an irregular flat.Unless, of course, one is counting the entire decline to SPX 1102 as an abA.And the 1231 high, 1075 low, as part of an inverted irregular abB wave.
tony, you counting this as 3 waves or 5 from tuesday’s low?
Wldcttr, Looks like five up on all timeframes.
these past couple months, everything looks like one wave, straight up or straight down. haha.
Thanks Tony, much appreciated as always
Hmm FTSE Chart, 5 waves down, would that satisfy the EWT rules given that your wave 3 is the shortest wave?
Hi Sarah, Which wave 3?The two third waves posted are both longer than any of the first or fifth waves.
DJI Time Ratio…
http://astrofibo.blogspot.com/2011/10/dji-time-ratio.html
SP500 Time Ratio…
http://astrofibo.blogspot.com/2011/10/sp500-time-ratio_06.html
Must break .786 levels for DOW S&P NASDAQ
http://www.wavegenius.com/2011/10/06/1208pm-elliott-wave-noon-update-video-for-10-06-11-must-break-786-levels-for-dow-sp-nasdaq/
Tony,Am saddened to hear about Steve jobs today, prime example set by him to the youth of the world that one can truly make a difference by one work.US should be really proud to have given an innovator like him to the world.His Stanford speech continues to inspire me may his soul rest in peace
Amen to that Vishal
Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!
1165ish = rsi(14) at 50 ..also 1164.75 = 38% (1220->1074)
Hi all, my brother ownes an authorized repair facility for semi tractor trailer trucks on I-80 here in eastern Iowa. A couple of days ago, the truckers were telling him that it looked like the movement of goods on the east coast was coming to a screeching halt at a time when the truckers are typically seeing higher activity as businesses gear up for the holidays.
thx McKennedy
This is just the opposite of what FedEx CEO said this morning. He expects Seasonal shipments to be up 4% and NO recession..FWIW
I spent some time on I-55 and I-40 last week and these seemed to be an awful lot of trucks on the road…some of it could have been due to the Albuquerque Balloon Festival though
…however, the recent reductions in interest/mortgage rates and gas prices should def. help with consumer spending in the 4th qtr…P&f charts saying $wtic going to $65..
unless it hits 85 again
Hi CB,
Take those PnF price objectives with a grain of salt. Consider it only as a guideline. Reliability is 50/50 from my experience.
I do, Igor
For whatever it is worth….here is my EWTc for OMXS30 (swedish index, 30th largest companies in Sweden, export oriented). The interesting thing with OMX30 is that it has high correlation to SPX and it is “high beta” to SPX. It normally reacts “early” to SPX. OMX30 indicates that “SPX 1150″ is already broken on the upside.
Daily
http://screencast.com/t/Fo2B32Rxf
Hourly
http://screencast.com/t/EIe9G1mgXg83
thx Magnus
S&P broke .618, next layer of resistence = .786
http://www.wavegenius.com/2011/10/06/1057am-sp-500-visual-10-day-chart-618-and-786-retracement-levels/
Good morning
Anybody out here pay attention to the Challenger announced job cuts data point? Seems to be like one that is widely ignored. However, it seems to be a fairly good leading indicator. We have only ever had spikes like the one recently posted heading into or during recessions. I would expect unemployment rate to increase again from it’s current hover mode over the following months.
Layer that on top of the fact that this is beginning to replay like 08 all over again and it seems fairly reasonable to assume an interim rally back to that 1250-1260 level before the mkt realizes that there isn’t a quick fix to Europe and *oops*, too late, we’re in a recession again (or something that feels just like one).
And this crazy talk about punitive trade tarriffs against China that are being circulated through the Senate is bringing flashbacks (well, not that I was alive then) of the protectionism that helped bring along the Great Depression. Interesting times…
Tony,
1150 has been breached on the spot Index. So this ain’t no 4rth wave. That’s confirmed. What next ? A rally to 1235+ ?
http://www.anirudhsethireport.com/sp-500-above-1142-rally-to-continue-dow-jones-above-10946-no-worry/
“Yesterday we had mentioned we see Rally upto 1235-1242.50 level”
Welcome Kling,Possibly … an uptrend to SPX 1223-1258 once confirmed.
99% retrace in ES 1147′s
3rd times a charm
or u could just say screw EW and see the 10 point dip each morning and buy it. That’s for smart people though. Cya at SPX 1040
Here’s ur fade cuz I liked em @ 47 so I luv em overbought @ 1168 pivot. GL
Tony you said; “Bear markets can not be five waves. A larger wave within a bear market can be a five, i.e. either five in the 5-3-5 of 2007-2009.Bear markets are simply corrections to previous bull markets of a similar or greater wave degree.Corrections, by definition, are always three waves.”
I track the FTSE and only see 3 waves so far – not sure about the other indices so I wonder if that 5th wave that was on the SPX and Dow was really a 5th wave in a or C wave? I think Dave Bannister posted a chart up a few days ago which suggested this possibility.
So far the 5 year chart does not register as 5 waves either so don’t know what sort of perspective you would put this in… but would be interested in your thoughts…
Welcome Sarah, The FTSE count we have been tracking displays five waves down from Februaryhttp://stockcharts.com/h-sc/ui?s=$FTSE&p=D&b=3&g=0&id=p46604882284&a=67317693Longer term, this could even be counted as an irregular flathttp://stockcharts.com/h-sc/ui?s=$FTSE&p=W&st=2002-10-01&id=p75278379624&a=67423765
Morning, guys!
Yesterday’s strong market performance was not enough to switch sector BPIs into a buy mode. All sectors stay in a sell mode currently.
As I mentioned BPI filters noise putting more emphasis on a prevailing trend, down in our case. 6% of sector stocks should get a new buy signal on their PnF charts to switch BPI from a column of Os to a column of Xs. It ain’t happened yet.
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3474785&cmd=show&disp=p
What is the count if 1150 overlaps? Thank you.
Welcome Andrew,Possibly and ending diagonal triangle.http://stockcharts.com/h-sc/ui?s=$INDU&p=60&b=1&g=0&id=p86169286975&a=67036682
Tony
Could you please expand on that comment, bear mkts don’t start w 5 down.
Are you implying that the top in May might only be the end of primary 1?
not cycle 1?
Thanks
Hi Jaja, Bear markets can not be five waves.A larger wave within a bear market can be a five, i.e. either five in the 5-3-5 of 2007-2009.Bear markets are simply corrections to previous bull markets of a similar or greater wave degree.Corrections, by definition, are always three waves.
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good morning Tony . Pls give us a rough or basic idea of your own proprietary (trends). It has turned to be THE key to understand the recent ups and downs. It will help us follow your methodical way of thinking without asking you every day about this or that. No need to divulge any secrets just basic pointers .. and thanks as ever. .
Mornin Megz, Markets create Elliott waves every day in their normal operations of price fluctuations.These are the smaller waves which create what we call significant, meaningful waves, or medium term trends.These trends are waves which create the long term trend, the general path the market is tracking.Overall investor sentiment creates these long term trends.The market trades everyday using the information it is provided with the backdrop of a positive/negative investor sentiment.This sentiment can not be quantified by taking a poll of who is bullish/bearish.It is quantified by the pattern the medium term waves create within the long term trend.When markets display indecisiveness for extended periods of time.OEW can still quantify the medium term trends within all that noise.One could state; OEW tracks investor sentiment which displays itself as medium term waves within a long term trend.Hope this helps.
Thanks Tony .. It does help … such bold idea – sentiment can not be quantified by taking polls -.
Still, I find ” the pattern of the medium term waves ” liable to different interpretations while it is forming.
Megz7,All we can do is track the obvious pattern.Then monitor and adjust as the market unfolds.
http://amalgamator.co.uk/2011October5th.aspx
Thanks Tony.
Tony,after the completion of an Ending diagonal we should get a strong rally upto the start of the formation. Market here just behaving like that and it should go around 1220-30 kind of level before the desired correction sets in.If we have bottomed @1074 then 50% retracement resistance comes around 1225.In between there is another resistance @1190 the 38.2% retracement level.
thx Joy
Does anyone else feel that if the market didn’t bottom yesterday, things are about to get really nasty?
I agree with You…Mr.Equity. I think
we go C down to 1020 … Then X-mas
rally upto 1220 then complete this cyclical
bear within our secular bear market in
Spring ~ 875 SPX
“Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them because they change things… they push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do. ”
Steve Jobs
=)
This is a prepared text of the Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005.
I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.
The first story is about connecting the dots.
I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?
It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.
And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.
It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:
Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.
None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.
Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
It was a great speech, wasn’t it? And it’s really fascinating how his success story was totally rooted in the pain he felt in his personal life. It seems that the main thing he wanted to do in his life was to prove how wrong his biological parents had been to put him up for adoption b/c of the supposed necessity of higher education in life. He totally proved their assumptions wrong by succeeding despite being a drop-out ., and in the field he knew virtually nothing about….Just a human way to deal with whatever was wrong with one’s relationship with one’s parents …it’s incredible how strong and motivating those emotions can be..there was NO way that guy was NOT going to succeed in life …the pain must have just been too strong for him and he had to do something about it… a great life story…
thx CB
Our sweetest songs are those that speak of our saddest thoughts…. I completely agree with ur analysis CB…
I like that thought, Anando. Thanks. Sad or not, the truth is always the only thing there is.. and Jobs found his and dealt with it..ultimately a very happy process for anyone to go thru..
Thanks Tony. Appreciate the content you present here. RIP Steve Jobs.
Welcome Prechterized
Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!
NAS Fibo…
http://astrofibo.blogspot.com/2011/10/nas-fibo.html
David your commentary is greatly appreciated
Hi Tony,
Very interesting commentary regarding the relationship of 2007-2008 and the present structure. It seems to “me” the 50 week ma looms deep in the background as it did in 2008 somehere in the vicinity of SPX 1250-1270 where much resistance waits and as described the bottom falls out. Again, to me, that is the obvious case for the bear. – An alternative idea hangs around in my mind – a little more bullish meduim term. Still looking at the weekly structure of the SPX- there still is a higher low and a higher high in terms of 666, 1250, 1000, 1350. Perhaps- just maybe the real end of the bull will be the ultimate retest of the mother trendline from 666 , 1000, 1300 , ??? Considering ‘one’ time relationship in this bull market , bottoms to tops average apprx 13 months, the 2012 election “result” would be the target (using Oct 4, 2011 as the low). Where does the mother trendline extend at the 2012 election? Approximately 1600 . I believe a similar number was one the blog has been looking for quite some time. And since my e.s.p. must really be rolling today- I have”1600″ drops fast to 1400 , grind to 1450, then dramatic long painful selling to 1163, return to 1220 and ultimately ending the bear at 1000. How long could it take? No less than the time equal to the bull= 39 months. (here I have been conflicted as bears usually take a fraction of the time, but given the fundamental circumstances- the financial crisis, I think it will be misery on top of misery)
After a recovery and base for about a year at least we will be on time for the 2016 next phase up (no coincidence I read it here first)
Thank you Tony for a wonderful blog and chance to express.
@almostnrml
Oh- why the 2012 election? Fundamentally- I think it is sell the news and the choices for our leaders will be the reason in addition to above mention financial crisis which will finally present itself in 2013 – Most likely March.
Hi Almost,Interesting scenario, and it somewhat fits another alternate we carry: NAZ charts.Currently I see one problem, though.We have five waves down from 1371.Bear markets do not unfold in five wave structures.
Tony,
You say bear markets can’t unfold in 5 waves structures. Did you mean a bull market correction? A bear could unfold as a zig-zag 5-3-5, correct? At the current point if the most recent low holds that would be labeled as “A’ down and “B” up should be underway.
A bear market can not be a five wave structure.A 335 or a 535, like 2007-2009, is a corrective pattern and actually is three larger waves.Agree, five down can be an A wave.
Rut Fibo…
http://astrofibo.blogspot.com/2011/10/rut-fibo_05.html
Buy above 1150 sell below..would that be the essence of your call tonight?
Fish,This is a traders markets.The bulls and bears dividing line is 1150.
Everyone looking for that 50% retrace tomorrow down to 1110 area.Wonder if market throws head fake and we go up into Friday /Monday and head down Monday afternoon down into Wednsday as that is full moon date.
One final note, you can almost smell the Bernanke money press warming up, he has set us up for it with his “Significant risks” comments last week.
Good Stuff Tony, my gut says 1088 at worst is re-tested this month, but that does it after 5 fibonacci months and 78% retrace of 2010 lows and 2011 highs, gap fill at 1088 etc etc. Time to start looking to buy all pullbacks is my gut… guess we will see.