SHORT TERM: consolidation day and pullback, DOW -13
Overnight the Asian markets were mixed ending the day flat. Europe opened lower and closed down 0.3%. US index futures were lower overnight. The SPX opened four points lower than yesterday’s 1292 close and tried to rally. In the first few minutes the SPX hit 1290 but then pulled back, hitting 1285 around 10:00. Another rally attempt followed. The market worked its way higher to SPX 1292 by 1:30, then pulled back again after the FED’s beige book was released: http://www.federalreserve.gov/fomc/beigebook/2012/20120111/default.htm. Then from SPX 1289 at 2:30 the market tried to rally again. This time the SPX made it to 1294 then backed off to end the day at 1292.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.25%. Bonds gained 16 ticks, Crude lost $1.10, Gold added $11, and the USD was higher. Support for the SPX remains at 1291 and then 1261, with resistance at 1303 and then 1313. Short term momentum declined from extremely overbought early yesterday to below neutral today, then ended slightly overbought. Tomorrow, weekly Jobless claims and Retail sales at 8:30, Business inventories at 10:00, then the Budget deficit at 2:00. Also, the ECB has its bi-weekly meeting with a press conference thereafter.
The early pullback today registered the fourth pullback for the current rally from the SPX 1202 low in mid-December. The next rally, above SPX 1296, would create 9 waves up from that low and a potential conclusion to Minor wave 3. Minor wave 1 was also 9 waves up. Should Minor 3 equal Minor 1 the SPX could hit around 1310 before any sizeable, larger than 20 points, pullback. Should Minor 3 conclude around that level a 38.2% retracement could create a Minor 4 low around SPX 1269. Then Minor wave 5, to higher highs, should end this uptrend from the November SPX 1159 low. Lots of coulds and shoulds, but just trying to etch a potential roadmap for the next several weeks.
Short term support is at the 1291 pivot, SPX 1278, and the 1261 pivot range. Overhead resistance is at the 1303 and 1313 pivots, and then SPX 1327. Short term momentum is now slightly overbought. Short term OEW charts remain positive from around SPX 1230 with rising support around 1280. Best to your trading!
MEDIUM TERM: uptrend continues
LONG TERM: inflection point turning bullish
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
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Forgot something , Happy new year Lee !
Happy New Year ! 6pewb6
Happy New Year Pepe! How are things going for you?
haaaaaaaaaa thats Pepe??
it would be really nice..it’s been quite a long time..so I hope it’s Pepe.
Does anyone have the AAII #’s out today? I have been checking decisionpoint.com throughout the day and the number is exactly the same as last week which makes me think it isn’t updated yet.
Numbers are effective unchanged from last week…
Jan 12—-49.14——33.68——17.18………..still bullish…….. 31.96 difference
49.14 bull (+0.26)
17.18 bear (+0.02)
33.68 neutral (-0.28)
50 day at 98.58 in CL
How often does CL respect the 50 day – 50/50, 60/40 ???
today so far 100% of the time
And before today??? If u havent researched thats ok.
Hey stockpro2
I most def have not/never researched it.
SP500 High 12-01-2012…
http://astrofibo.blogspot.com/2012/01/sp500-high-12-01-2012.html
Guys I just got filled on CL short covers that I thought were pipe dreams today.
Any thoughts when u guys get a chance.
Alex
welcome to the dark side
Extension if we clear 1297.
Lee been doing a little crude trading lately.
Thought this may happen, but I am only trading oil to the longside. Been out since we hit over 103 this week. Kudos on the short
the news is EU holding embargo off by 6 months but commodities trying to tell us something ?
Thanks Tony
Im sorry I meant CL
Thanks Patrick
I was due !
Depending on the how ugly the downside gets for oil we could potentially revisit the 92.5 area for an irregular.
Will have to watch closely over the next few days.
Thanks patrick
I will be unbearable here if we hit $93
I might even have to start a pay service
“any thoughts” $67! Man I thought u were long with the they aren’t making anymore of it. NICE TRADE! kudos
LOL!!
Sounds like you are short for the duration here on CL (1-3 weeks).
The supply/demand situation is not great and the Euro politicians pulled the rug out from under the embargo idea. They have enough problems w/o $150+ oil.
Hey H D
U know what I probably shouldn’t of even said anything since I didn’t give any specifics on the trade today which makes me a hypocrite.
I just made the comment I thought a wave ended last week and I ended up being correct on some level yet to be determined.
On that note u guys have a great weekend !!
No prob TOOTS! We all know ur intradya both ways. Still kudos.. See ya’s. USA!
Lee, just letting us know which market u r watching and what ur bias is is really helpful…it’s really difficult to predict a politicized market like that…and it’s great how it worked out for you. Congrats! If you ever start a paid service “The (Pipe) Dream Merchant ” would sound kind of fun, . ..just/kidding – you’ve used the term first..
10 min SPX
http://screencast.com/t/tummuLo7dVp
Hey C B
ZC off the limit LOL
Haaa…poor guys didn’t know you’d go after them… they’re right and you’ve got the right moves Lee
…speed matters…just like in SPX now… bottomed nicely on 1 min and 5 min..and looks like they want to follow-thru on that..ay, caramba!
C B
They’re guys calling for 3.80 now in ZC who aren’t that terrible at calling ZC
Its not staying here fo sho
ES a cheap short for a scalp 1288-1292 IMHO
Thanks Lee, I remember u saying that June in the seasonal top in ZC..so we are like 6 Mos. away from the top….that’s soo bullish. ..
failed at 655 pivot?
Great Avatar !!!!!
Well H D ur pivot and this.
Mario, posted on my blog yesterday (CatchTheMoves.com) that the market would likely experience weakness/selling at the open but then bounce to probably (60% odds) close the day higher. Sell signal is possible for today or tomorrow if the Dow can close in the green — intraday activity/data will determine, I’ll know well before the close.
Don’t get confused with the subsystems — they never contradict each other but as they say, two heads are better than one, two cords are stronger than just one, etc., so view them like a firing squad: one shooter is sufficient but the more shooters (subsystems) that are in agreement (only two are needed), the odds increase to near 100%. I’ll point out an example next time we get two on the same day.
A lower close today should set up an extension of the rally in the immediate future (Friday or Monday).
Dow is currently 35 points off its lows, TNA just reached 50.
Happy New Year Catch !
Happy New Year sir! Nice to have you back.
Thanks catch,
Buying Jan 129 spy puts at 1.20
C=1.618 @ 1271 and fits the fractal ’11 1257 1296 1271 1304
Today is 1/12/12 – the same count the bears are dreaming of…….
good one HD!
It sure looked like a 5 down from HOD to me. I’m sticking with it.
cheap
I sure think there’s a Squatch in these woods
tna and drn portfolios were stopped out this morning, gold folio is still long.
Hey David Banister
Hey Dave it’s all good !
I’m 99% sure u put us all in the same room physically we’d all get along brilliantly !
GL !
lets all sing kumbaya
Give me a hug u big bipedal sweet heart
Venus cycle Friday http://planetforecaster.blogspot.com/2012/01/113-venus-cycle.html
Welcome Platypusfoot =)
Thanks Tony
My new favorite name
Thanks Platypusfoot
Tony, LOVE those details, please keep them coming.
enjoy it guys !
game on.. 1261 *
Thanks Lee!
are u having fun raiding ZC Today?
hey C B
everybody a bit bullish.. theyre dead right just not today
CL
David
http://www.flickr.com/photos/43542857@N07/6684524483/sizes/l/
Seems there are some sellers at 1296
below 1285 could start some more selling
and just when you thought we break 1300 …SPLAT!!!
It looks we will hit a new highs at the open..my short position will be stopped out…catchs system and subsystems 1 2 3 4 …should turned bullish…Tony suggest this is a new bull market (actually a bear market was never confirmed) so I guess I should go 150% long again …we will go up…
Catch: are you neutral or still short waiting for DIA at 125 to be brocken ?
Everyone getting bullish now!
I still believe for now that gold has one more pullback and quite possibly to a lower low. It should pullback anytime from 16 – 22nd Jan. 1440 is a 38.2% fib retracement of the advance since Oct 2008.
Oil as well from the end of this week.
S&P will find resistance in the low 1300s like Tony mentions and fall back sometime next week which is expiry. Markets have a habit of hanging up into expiry. The 1261pivot level that he’s mentioned is a good target. From the 26-27th we should be getting another pop and the key here is do we go on to another high for the Wave 5. If we do then expect 1360 – 1400.
However the suprise now could be we struggle on the supposed next leg up and head down into mid-March where there is a Major Bradley indicator 3/16. I will be interested to see the technicals, bullish reading etc. come early Feb.
thanks Alex
Alex,
2010 saw a correction in late-January/early February and then chugged higher into the end of April before all hell broke loose. 2011 saw a correction in late-February/mid-March before heading higher into late-April. In other words, 2010 and 2011 were up into late-April. Then all hell broke loose. I just have my doubts as to whether the same pattern can play out for the 3rd year in a row. Seems too obvious. I’d feel a lot better about this market if the Treasury market didn’t look so strong, the OEX put/call wasn’t so high, and sentiment wasn’t so bullish.
Morning Tony, appreciate the color
I did also read the report mentioned by David, and the valuation argument seemed fair and compelling. It seems likely that earnings and guidance this quarter will generally be a disappoint. What also seems to be the case, is that the market doesn’t care.
People buying on bad news does sound pretty bullish. I also agree that despite the AAII survey, people to me seem quite skeptical. (including myself) After all, it’s the entire reason why I added technical analysis/charts to my arsenal – markets can (and usually do) change course long before you feel better/worse about the fundamental situation.
That said, shorter term we are starting to look somewhat toppy. It seems like the domestic equities markets have mostly moved beyond the crisis concern, which probably explains why S&P futures are only up single digits instead of a lot more. European markets clearly are still in a more depressed, crisis-driven mode, and are rallying hard commensurately.
My biggest point of concern about the market right now is the lack of confrmation from multiple other markets. In particular, the treasury market is not giving me the signal I would expect at this point in time. With the S&P 220 points and 20% above its low, treasuries should be much more than just 20bp higher than its lows. There could be a QE3 expectation/premium built into that number. However, outside of that possibility, it doesn’t make much sense to me. We should be seeing a stronger rotation in asset classes. Credit spreads are also much closer to recent wides than should be the case for how far equities have come. The equity cushion added back to capital structures with the rally in stocks should have had a much stronger effect on implied default risks. Today is a fine case-in-point: the CDX IG index is only about 1.5bp tighter this morning. Cash bonds are also only modestly tighter, and we are not seeing substantial account buying at tighter levels.
Right now I think the various markets are battling with two opposing forces: the positive impact of diminishing crisis concern and the negative impact of the economic fallout, namely lower profits. So, crisis averted (for now), but damage has been done. Has all the damage been priced in? We will see.
I am disheartened by several key indicators, the Baltic Dry Index being one of them. The index is down 35% in about two weeks, highly inconsistent with economic recovery. The move to negative real rates indicated by the TIPS market over the last two months also continues to reek of a potential stagflationary environment. Real 10 year rates are now back down to levels very close to where they plummeted to in August, back when the equity market thought the world could fall apart tomorrow. Lastly, comments from bellweathers such as ORCL, MSFT and CVX recently don’t seem support a “muddle through” situation.
Long story short, I’m pretty flat and waiting for some more confirmatory pieces to fall in line before I believe it. I will miss the bottom, and I can accept that!
Appreciate your view RC
RC,
I’m in your camp. Quite skeptical due to weak internals, a stronger than normal Treasury market, the uncomfortably high OEX put/call ratio, and some very bullish sentiment #’s out of AAII and sentimentrader.com. Investor’s Intelligence isn’t exactly bearish either. Last week bulls hit their highest level since April 2011.
Read a great article (forget author) by a well known strategist laying out Europe, SP 500 and why market is climbing. If I summarized it in a few words… PE Ratio… it shrank last year, and now its expanding again… and the PE ratio on operational earnings is as low as it was in 1987
I guess that makes sense
looks like my ABC call is on the precipice of being dead wrong… we shall soon find out
Cheers all
D
david rosenberg at gluskin sheff
Mornin RC, Whatever the reason, most of our indicators have turned bullish.And the wave pattern from the Oct low looks bullish.Plus, we just this AM developed a new indicator to measure public investor sentiment.Despite all the hoopla about them being too bullish, by historical standards, they are currently bearish.Draghi speaks in about an hour…8:30 EST.GL
Tony ,why dyu have justify again and again for being on the right side?
Hi Vishal,Not trying to justify, just offering some details.Hopefully, as long as the market cooperates, to help those that are undecided.That’s why this blog exists … to help others through these turbulent times.
Ya i know but the basic point i am tryin to make is, at times we all indulge in astrology and try to predict the market instead of letting the market decide and we follow its path and make some good money in the process,i was doing the former as well but now i am in the later stage and a happy phase in trading, longs got triggered in gold yesterday,my bias is bearish with a large B, but am long with sl 1635
Gold has been, and continues to be, the asset of choice.If the previous bull market patterns in gold continue, we should see a retest of the all time high in a couple of months.Then a correction. After that $2200+GL
You have caught the uptrend in gold brilliantly in the last few yrs, kudos to that! Although i disagree now, but your firmness and confidence is just great to see tony, thanx a ton!
Tony, what was the target for gold …2500 ? …
Mario, Just estimating using Fibo relationships, and previous waves:$1900, then $2200+
Dono,I don’t think he understands what he posts.He has been asked many times on several blogs what the mean and he is basically mute.He just likes to play copy and paste games
i’m raising stops to protect profits on current longs and will ease up on further purchases – too much uncertainty for my tastes.
Dono
I agree- I’m in the dark on these astro charts. Seems a little hocus pocus.
But maybe I’m missing something as well.
Agree. Those charts have pointed down for the past couple weeks while the market has just gone the opposite direction – what’s the point ? No clue here either…
Not fighting yesterday’s war as much as being like Gen. Patton and studing military history. The enemy is always the same but ever changing. We are our enemy.
most recent roadmap for anyone interested:
http://standardpoor.wordpress.com/
This is a link to a non-EW related article but is never the less interesting from a market history/pattern regonization stand point.
Tony,
I am leaning toward the T Bond barely jabbing through the previous a wave high to complete c wave and larger C then starting a correction. Do you have an opinion on this?
Hi Bill, Certainly possible.Lots of negative divergences on the weekly chart.
non-EW link not posted in above post. http://advisorperspectives.com/dshort//guest/John-Carlucci-120110-The-Great-Repression-Update.php
Fighting yesterday’s war?
Thanks very much Tony.
A quick question on the Rsi, which is kind of puzzling hereon 60 min…Rsi (14) and Rsi (5) seem to be showing two different things – while rsi 14 shows neg. div. 1284 vs 1296.,rsi 5 doesn’t. In your experience, have you found Rsi 5 to be generally more reliable than rsi 14, Tony?
CB, The 5 RSI is geared to shorter term moves, and helps in other ways.RSI 14 is kind of an odd number for a growth pattern, like the 50 and 200 dma’s.Maybe RSI 13 would work better, and a 55 dma vs a 233 dma.These are all fibo numbers.
Thanks Tony!
Naz seems to be leading the way, for now. That’s usually bullish. Many tech icons report next week. Their earnings, and more importantly guidance, should heavily influence the direction of the Naz short-term.
That is correct. Another interpretation could be froth has to lead before any decline .. fun times!!
ASTRO Venus-Neptune 2000-11…
http://astrofibo.blogspot.com/2012/01/astro-venus-neptune-2000-11.html
ASTRO Mercury-Pluto 2000-11…
http://astrofibo.blogspot.com/2012/01/astro-mercury-pluto-2000-11.html
astrofibo -
I’ve looked at hundreds of your charts over the past year or so and have to admit that I mostly don’t see any relationship between the market patterns and these astronomical cycles. I’d like to understand your work here, so is there a reference you can provide regarding how to interpret these, or is it possible to add a line or two of interpretation to your posts? I rarely see that others comment on these, so perhaps I’m not the only one who doesn’t understand this. Most repsectfully,
dono
ASTRO January 13 2012…
http://astrofibo.blogspot.com/2012/01/astro-january-13-2012.html
ASTRO Moon Cycle…
http://astrofibo.blogspot.com/2012/01/astro-moon-cycle_10.html