SHORT TERM: overnight rally fades then rebounds, DOW +22
Overnight the Asian markets were -0.2%. European markets opened higher but closed about flat. US index futures were higher overnight, but began to fade after weekly Jobless claims jumped: 399K vs 372K, and Retail sales were lower than expected: +0.1% vs +0.2%. The market opened three points higher than yesterday’s SPX 1292 close. Then hit a new marginal uptrend high in the opening minutes at SPX 1297. After that another significant pullback unfolded down to SPX 1286 by 10:30. At 10:00 Business inventories were reported positive but lower: +0.3% vs +0.8%. After finding support near the previous pullback low, (SPX 1285), the market started to rally. For the rest of the day the market worked its way higher, hitting SPX 1297 again just before the close. Then ended the day at SPX 1296.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.45%. Bonds lost 6 ticks, Crude dropped $2.00, Gold added $7, and the USD was lower. Support for the SPX remains at 1291 and then 1261, with resistance at 1303 and then 1313. Short term momentum displayed a negative RSI divergence at today’s high, declined, then went right back to slightly overbought. Tomorrow, the Trade deficit at 8:30 along with Export/Import prices, then Consumer sentiment at 10:00. At 11:00 FED governor Duke will give a speech in CA.
Today’s new uptrend high and 11 point pullback, may just be an early sign that a larger pullback is underway. We had just posted this yesterday: The early pullback today [wednesday] 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.
We have posted a tentative Minor wave 3 at today’s SPX 1297 high on the SPX hourly chart. This rally, from SPX 1202, has now unfolded in nine waves, was/is impulsive, and may pullback better than 20 points to complete a Minor wave 4 before the uptrend resumes. A rally beyond SPX 1297, the market closed at 1296, would suggest Minor wave 3 was extending, and the Minor 3 label would be removed. After 9 waves up in early December, to end Minor 1, the market retested the SPX 1267 high before heading lower. This could have possibly occurred again today. A rally to SPX 1298 would likely rule that out. Short term support and resistance levels remain the same as yesterday. Short term OEW charts are still positive from SPX 1230, with support now at around 1282. Best to your trading!
MEDIUM TERM: uptrend new high SPX 1297
LONG TERM: inflection point turning bullish
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
ESH futures settle at a premium to the cash close.
Its what the cool kids trade.
Sold
Futures open Sunday nite and trade till 10:30 CT am I m pretty sure
France downgraded AA+ wee wee
thanks, cool kid!
Tony, I guess SPX 1285 wasn’t lost after all.
Impressive resilience today, let’s see what Tuesday brings. Have a great weekend.
cheers Catch!
Hey Catch
low volume robots vs college kids trading ES futures today.
Its all about the gaps and I think we’ll see another one Tuesday
I think you’re right.
Keys kiss the correction theory goodbye, US mkts have been great today, smart recovery 1310 beckons next week
Socialization of Housing
How can that be good ?
Bythe way when was anything good about us housing mkt except the debt
ABC up in SPX from days lows in process of completing ?
Sure, you do not want to hold a position over a three day weekend.They may downgrade Germany and the market could be up 20 handles.
Hahaaa, happy long weekend Tony and Lee, Monday off is a rare event, njoy
cheers Vishal!
Haaaaa How bout it
I’ll use my wifes money then
My wifes money is my treasure in a bear mkt
98.94 ish = 23.60% morn low /yes high
see where it closes…long weekend
Ya I think you should start paid service
vishal
What should I charge ?
In the 1970′s the government took over abandoned housing and sold it cheaply to the public.Then, even with high rates, the public bought – remodeled – and then sold.Nowadays the public does not have the savings, nor the desire to own housing.Ninja loans destroyed confidence.
If you are 99% accurate then may be 99$ will do ( hurry up USD is in a bull mkt )
Tony have you tracked the Chinese housing bubble, it’s incredible
Not at all Vishal.One housing bubble and burst is/was enough for me.
Vishal, $99 is a nice friendship price and I am sure Lee would give it to you as a friend…as a business decision and considering Lee’s talent though one would have to do a little comparative analysis and see what, say, people in Boston charge and at least tripple that for superior quality AND extraordinary entertainment value.
And thank Goodness Lee and Tony do not charge us for sharing their talent and knowledge. Thanks guys! You are amazing! Happy weekend all!
CB the best things in life are for free, Tony is a Noble soul, god bless him, who else will answer my silly question at 6 am
That’s so true Vishal!
Tony
It’s one thing to get a reply/answer/opinion from a fellow poster in such a short time but the fact that it’s ur blog and u participate here is such a cool thing.
I appreciate it immensely !
Lee, The benefit of this blog is that I receive an email every time there’s a comment.Btw, is Germany the only major left that has not been downgraded?
Get ready for the Indian housing bubble in 2013
Ya Vol ! Tony
And Great Britain but they dont count (EU)
A crude oil close below 98.50 would be a chink in the armor of the bull case. Watching closely……
Uh oh I’m seeing green “1″s at gold and silver. Time for a correction there too I guess.
Hey Joe. Here is how I am looking at that labeling: Right on! One step closer to confirming Major 4 is in. Patrick just needs to change the color to BLACK.
Cheers
S&P downgraded France one notch. Reason for most of the selling?
http://blogs.wsj.com/marketbeat/2012/01/13/france-downgraded-one-notch-we-have-confirmation/?mod=yahoo_hs
…And market hardly selling off on the SP downgrades (Italy as well). A few months ago we’d be down 500 pts. Shows the resiliency of the market today – or the meaninglessness of “downgrades” to nations… Either way this is bullish behavior as that NYAD has been pointing out.
Cheap short at 1280 ES me thinks
Lee, thanks!
What are we looking at on ur avatar?…Looks like a really nice garden…it almost looks like those Irish scenes you showed us last summer…where is that., Lee?..I want to go there (while it’s still cheap)
Hey C B
http://www.powerscourt.ie/
Hey C B
It’s about an hour south of Dublin u might of seen the chick flick “Leap Year” it was filmed in and around Enniskerry, Co. Wicklow which is the town nearest by. That’s Sugar Loaf Mountain in the back ground.
We absolutely love the area.
Thanks Lee!. Aah, I am taking all in right now
…love those gardens & folks over there have always been pros at designing them…you could spend a few weeks in Europe just visiting gardens. Need to get there sometime ..do you like gardens Lee, or ur wife had to drag you there 
C B
I’m a closet botanist.
Thanks Lee. Oh, I am so glad I asked you about it & I am gonna see that movie too…the best stories are the ones with surprise ending -shouldn’t have read the plot but I just did..lol…sounds really good.
medium-term , it’s interesting that $NYAD exceeded it’s July high on this recent rally. So, a re-test of 1357..at some point..
CB, Good point.That does not occur during B waves.
Thanks Tony! So, I guess we’re so much closer to solving this market mystery than we were just a few days ago…
I guess all this selling in banks is ultimately means more Fed’s ‘attention’…. and more $$printing..so the market should be happy.
CB, Just posted this in the SPX weekly chart. Consumer sentiment is bearish at 39% The ECRI is bearish at 41.6% Investor sentiment is bearish at 46.1% (these are all adjusted numbers and anything under 50% is bearish) Yesterday the SPX closed only 5.5% under its May 2011 high. The market has everyone exactly where it wants them.
It must have taken you lots of time & effort to figure out exactly which stats to follow closely & how all of them correlate with one another…that’s really invaluable info, Tony…thanks so much for having all this available on ur great site.
It’s interesting that the ‘unhappy’ consumer did go out recently & borrowed a lot, according to the recent consumer credit …are they gonna spend more or are they just trying to prepare for the next storm..
thanks CB, We’ve been working on selected fundy indicators since 2008.Each one was backtested with at least 30 to 60 years of data.Consumer sentiment bottomed in the summer at the same level it hit in 1980.1980! Isn’t that amazing. That’s the lowest level in over 30 years.A classic Wave II bottom.
Tony,
Thanks for mentioning the consumer sentiment. That really is a big clue. I hope this also means that the RE market will find a firm footing here and move back up again. I would love to refi at current rates. Joe
Hi Joe, The gov’t is thinking about selling the FNM/FRM foreclosures to corporations.The REITs would then turn them into rentals, which obviously is in great demand now.If enough foreclosures can change hands, supply would drop considerably.This would support the RE market over the next few years.We’re waiting for an indicator next week to see if the bottom is in.So far, so good.Mind you, RE prices should base for a few years before entering a sustainable uptrend again.But 2012 could confirm the turning point.
Very interesting. Thanks Tony. I wish I could compare today to 1980 – the prblm. is my parents were paying for everything then, so my confidence was always too high..
Just like the kids of today =)
What are the chances that were in a Home Rental Bubble?
Good!
That’s what I’m expecting too, CB.
thanks Catch.
It would be if, say, someone was paying someone elses’ rent, Lee, (like a gov. handout). As long as we have a normal supply/demand market , it’s not a bubble. Normal demand in is when you have a “willing and able” buyer. So, for instance, the housing bubble was a bubble cause some of the buyers were willing, but to quite “able” – they didn’t really have the income stream to support future repayment.
it should have read: “willing but not quite able” buyers…sorry
Tony
Am I reading this correctly?
If 12876 is broken on the Dow, is that the all clear for a wave 3 bull market in progress, and removes the possibility of a “c” wave down and the bear market? As far as I know, the “B” wave of a wave 2, can not be higher than wave 1. Once it clears wave 1, it becomes wave 3 and can not be an ABC wave 2..
Thanks
Hi KJB, Anything over 1% higher would ‘historically’ negate a B wave, yes.
Market down on the heels of yesterday’s Sell signal. See blog for details. Only half-position at yesterday’s close, the remainder at this morning’s open. Yesterday afternoon’s signal has been good for several hundred points in the past, so looking for at least 12000-12200 on the Dow before next rally.
Great update Tony. I’m expecting a bigger pullback than the ones we’ve seen since November but think that thereafter new uptrend highs are probable.
Thanks Catch,Noticed most were a bit bearish yesterday.Not all that sure how this market can fit in a Minor wave 4 here without making the pattern a bit messy.But we shall see.
get er done guys
I’m sure that you will stay on top of the market from a waves perspective Tony, as ever. From my system’s perspective, yesterday’s particular signal is usually good for several hundred Dow points but hasn’t usually marked major/longer-term turns in the past. So in the parlance of EW, I wouldn’t be surprised to see a corrective pullback here and then a rally to at least challenge the highs of last spring. Breaking SPX 1285 should bring an extension of this nascent pullback.
Catch, Both 1286 and 1285 already lost.
Should have read “Breaking 1285 should NOW bring…”
Tony,
I was actually bearish on the 10th. In my report 5 minutes after the open on the 10th I set 1296 as serious resistance. I also called the 11th & 18th as the next CITs and posted here yesterday afternoon I was buying SPY puts. They are up 50% today. We should be near 1250 in the next few days.
thanks Scotty kudos!
Scotty, haven’t you been short since late December? Was still a nice trade you made yesterday, kudos.
Yes short since 1269 on the 27th 5% position
Short gold 10% and another 5% SPY yesterday
By early next week will be + 200 to 300 % on all.
Approximately 40-60% return in about 2.5 weeks on total portfolio.
Thanks for asking.
GM all, After seeing 5 waves down yesterday came in short on retrace. Took em off 1280. I’m very happy with the waves. Respecting the flat potential.
60% of the time-it works every time
http://flic.kr/p/bc9Ld8
perfect!
Cheap and spot on H D
Thanks for sharing that chart yesterday.
Very nice work. thanks HD!
Yikes no flat! 1267.06 for overlap and MA89 sig on deck. Last bull entry or we have a complete wave. 1273 is >14 points away from HD MA which is stretching it IMO.
1273-1286…. have a good1
in my humble opinion a turning point is turning point is impending:
http://standardpoor.wordpress.com/
I wonder if the stats listed in this link give us wave 4 before a wave 5 high. There is a very high statistical probability of lower short term after tomorrow. http://www.safehaven.com/article/23973/spx-at-multi-month-high-before-opex
Read that, interesting.
Hey Tony,
I like and agree with your statement, “They also paid out most of their earnings to shareholders, not to themselves through stock options.Shareholders, these days, own only a piece of paper and not a piece of the company.19th century investors would not touch 21st century stocks.” Don’t you think people/investors are going to force a change? I thought this years ago and it seems it has been very slow to change.
Shaun, If just one changes, they all change.
Tony,
When looking at the bullish scenario on the S&P chart vs the bearish on the Dow….wave 3 on the S&P does not appear very impulsive. The Dow seems to have the better look.
If the Dow scenario holds we could still go break the May 2 high as a “flat” correct?
Joe
Hi Joe, Yes the DOW impulsed a lot better than the volatile SPX.That was the tip off.True, the market could make a double top, or slightly higher, and still be a B wave.Most of our indicators are on go.We’ll just have to worry about that when, and if, we get there.cheers!
Thanks again for the blog tony
Thanks Igor for the chart
Hey Alex It’s never easy is it ? Nice call
you’re absolutely right – it never is! hopefully this one works out well. if the s&p tops today or next week then it should continue to the downside. knowing my luck something will probably happen in the Strait and my patience on this trade will have all been for nothing! Hope not. later toots
edging into gold shorts here now as well. mindful though we could continue higher into 16 – 22 though much like the s&p.
Tony have you ever looked at this interesting website:
http://measuringworth.com/gold/
It has data going all the way back to 1257! Though the Gold price data seems to have been inflation-adjusted, which is a bit unfortunate.
You can chart various historical data-sets here:
http://measuringworth.com/graphs/
Unfortunately the Gold charts don’t seem to be working at the moment; but the CPI and RPI charts are quite intriguing.
I wondered whether the number of inflationary cycles is equal to the number of stock market cycles? If so, would these charts provide evidence to prove your theory about the Grand Supercycle having begun in the South Sea Bubble of 1720?
I tried charting US inflation between 1774 and 1929 and found significant peaks in 1814, 1865 and 1920. Possibly the first two peaks indicate the two supercycles of GSC wave 1?
See chart here:
http://measuringworth.com/graphs/graph.php?year_from=1774&year_to=1929&table=US&field=DOLLAR&log=
Thanks Alex,
will look into it
Sorry I missed out a word, I meant to write:
“Possibly the first two peaks indicate the two Supercycle corrections of GSC wave 1?”, i.e. Supercycles 2 and 4.
Could be.In those days everything went up in price during inflationary periods, even stocks.Companies made more $$$ during those periods, a commodity economy.They also paid out most of their earnings to shareholders, not to themselves through stock options.Shareholders, these days, own only a piece of paper and not a piece of the company.19th century investors would not touch 21st century stocks.
Interesting: in that case the inflationary troughs of 1843 and 1898 could represent the two Supercycle lows.
For the period prior to 1774, there’s a significant low in the English RPI in 1732, followed by a long uptrend ending in 1813. So perhaps 1732 would mark the beginning of the GSC?
http://measuringworth.com/graphs/graph.php?year_from=1650&year_to=1850&table=UK&field=CPI&log=
RN Elliott, in the 1930′s, referred to bull markets as periods of inflation.That appears to have been common theme prior to the FED.Booms and Busts, inflationary periods and depressions.Will need to recheck my numbers and analysis to make the comparisons. But offhand they appear to fit.
Crisis periods usually include SC lows and are followed by a major war.The last three crisis periods were the revolutionary war, the civil war and WW II.Neither of those dates would fit.
There was also a significant inflationary low in 1655, not long after the English Civil War. That was preceded by a long uptrend in inflation lasting from 1511-1648, a period of expanding trade links and colonialism, when England was plundering the rest of the world for its riches!
Perhaps the English Civil War is a candidate for the market low that preceded the current GSC?
Alex, This provides an historical reference:http://fourthturning.com/my_html/body_turnings_in_history.html Dates may be a bit off by a few years, their political scientists. The Glorious Revolution starts the GSCThe American Revolution SC 2The Civil War SC 4Then WW II starts the next GSC.The current Milennium Crisis SC 2.
Thanks Tony.
Ofcourse we shouldn’t forget the War Of 1812, which resulted in the British burning down the White House! That must be the cause of the inflationary peak in 1814.
The 1865 peak was obviously caused by the American Civil War, and the 1920 peak must’ve been due to the immediate aftermath of WWI.
In any case the number of economic cycles is probably more important than the actual dates of the peaks and troughs.
I can see three obvious inflationary cycles between 1655 and 1933, which would seem to line-up with your theory of a 5-wave GSC1 pattern ending with the Wall Street Crash.
The Glorious Revolution of 1688-9 does seem to be a good candidate for the beginning of the cycle, coming off the secular low of the English Civil War of 1642-51.
thanks Alex … agree.
Tony,
Think we are heading to 1230 pivot
update- New count
1-of-3-complete cit-on-the-18th
Scotty, Hard to expect a drop below 1267 until this uptrend ends.
In due time
Tony at point do you expect this uptrend to end
Hi Pooch, We see significant resistance between 1313 and 1327.
Thanks Scotty
Tony Aden Sisters today gave a all time high target of $3k for gold although no timeline has been given!
Sai, Will just take it one resistance level at a time until we top.We still have $3750 posted, from 2009.
Thanks Tony agree with you.
Toots – reversal in crude!
Lee, this is for you:
http://stks.co/1uG9
ASTRO January 12 2012…
http://astrofibo.blogspot.com/2012/01/astro-january-12-2012.html
ASTRO Moon Cycle…
http://astrofibo.blogspot.com/2012/01/astro-moon-cycle_12.html