SHORT TERM: quiet opening then new highs, DOW +97
Overnight the Asian markets were mixed gaining 0.3%. Europe opened lower, but ended about flat. US index futures were lower overnight. At 8:30 the PPI was reported negative: -0.1% vs +0.3%. At 9:15 Industrial production was reported higher: +0.4% vs -0.2%, as was Capacity Utilization: 78.1 vs 77.8: http://www.federalreserve.gov/releases/g17/Current/default.htm. Then at 9:30 FED governor Tarullo’s congressional testimony was released: http://www.federalreserve.gov/newsevents/testimony/tarullo20120118a.htm. The market opened slightly lower at SPX 1292. Two points under yesterday’s SPX 1294 close. Then after a dip to the OEW 1291 pivot the market started to rally. At 10:00 the NAHB housing index was reported at a 4 year high: 25 vs 21. The market continued to rally until 10:30 when it hit SPX 1302. After a pullback to SPX 1298 by 11:30 the market headed to new uptrends highs. Heading into the close the market hit SPX 1308 and closed there.
For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +1.45%. Bonds lost 11 ticks, Crude added 15 cents, Gold rose $11, and the USD was lower. Support for the SPX moves up to 1303 and then 1291, with resistance at 1313 and then 1363. Short term momentum hit overbought again after dipping below neutral yesterday. Tomorrow, weekly Jobless claims at 8:30, along with the CPI, Building permits and Housing starts. Then the Philly FED at 10:00.
This morning Doug, in our group, noted that our short term count for Minor wave 3 needed to be adjusted. He had noticed our Minute wave iii was the shortest of the three rallies. After reviewing the wave pattern from the SPX 1202 we adjusted Minute wave iii to the second SPX 1297 high, and Minute iv to the 1278 pullback.
Then, after further review, we observed Minute wave iii (1230-1297) was a nice fibonacci 1.618 times Minute wave i (1202-1243). This allows Minute wave v, of Minor 3, to now reach any level it needs to complete this wave. For example, at SPX 1319 Minute v = Minute i. Counting from the SPX 1278 Minute iv low, we have had a rally to SPX 1303, a pullback to 1291, and now a rally to higher highs. This would suggest Minute v is currently in its third wave, with waves four and five yet to come. It now appears the upper range of the OEW 1313 pivot is a possibility before any sizeable, greater than 20 points, pullback will occur. Short term OEW charts remain positive from SPX 1230 with support around 1289. Short term support is now at the 1303 and 1291 pivots, then SPX 1278. Overhead resistance at the 1313 pivot, SPX 1327 and then 1345. Short term momentum is lsightly overbought. Best to your trading!
MEDIUM TERM: new uptrend high SPX 1308
LONG TERM: bull market
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
Are we there yet or one more 5 to come to go all the way to 1319? Next week could be the typical FED meeting low again around January 25th.
Thanks Joe. Didn’t know we have the Fed mtg.coming up. Is this supposed to be the 1st mtg. of the “more dovish” Fed, with some new, more liberal memebers…(?)…
SP500 Fibo…161.8…
http://astrofibo.blogspot.com/2012/01/sp500-fibo1618.html
Is anyone else thinking that 10 and 30 year yields have bottomed? TBT looking low risk here.
I had mentioned a few months ago that I thought that to be the case. still think so. at least, for the foreseeable future
Yes, I recall around 1159.
might have been a tad early on that one. rates have barely budged since then!
I trade T Bond futures not efts so my numbers are different. I believe that rates have bottomed for the short and long term. I am looking for bonds which are trading at 142-143 now to be at 125-130 by March. The long term cycle that I am looking at is the 30-34 year cycle so we could have a trading market not a directional market for awhile. I believe that Tony has discussed 2015 as a potential cycle high. A break of 140 basis spot futures confirms in my mind rhe move to 125-130.
Bill, The next downtrend will likely confirm a large ABC from Apr10.So there could be a big correction in Price ahead.But longer term, do not think the party will be over until the 30YR makes a new low in yield.
New 52 week high W3 Breakout in NDX = 4340?
http://www.wavegenius.com/2012/01/19/ndx-visual-4-year-long-term-chart-big-w3-breakout-to-new-52-week-high-ndx-4340/
German 10yrs (Bunds) just broke through and important level 139.24. If below for more time then down trend. Good auctions in Europe today
French Banks are really rallying (Societe General EWT I posted earlier). Fear seems to be easing. One thing missing right now is a Greek PSI agreement. Sell the news?
Hi,
I have changed my position in europe and I am short now… hope this is a good idea…
Best regards
PS: Its my first posting.
welcome Denis!
Thanks Tony.
I was just a silent reader but improving my english skills is also a nice additional benefit
Best wishes from austria
The other thing missing is earnings growth
O yeah….many things are missing. I’m not particular found of France but they have been in the media focus for a long time hence the possibility for an overreaction. Since first of august till bottom 5 weeks later SG were down more than 60%. And since Tuesday of this week they are up 32%.
Yesterday the new 1% minimum reserve requirement came into play (=€100Bn). In what way that amount of many will trickle through the system and then back to deposit is the $60 000 question. I believe that together with the LTRO III at end of Feb will be the some of the important market drivers for the next two (maybe three weeks).
Magnus,Are you expecting LTRO to be extended ?Draghi would take the helicopter title away from Bernanke; “Helicopter Mario!”Not sure Ben would like that.
Tony….I have absolutely no idea. What i mean with LTRO III is the “big” one in Febraury. In my way of counting there will be 3 of them at the end of Feb. LTRO I in July 2009. LTRO II in december 2011 and LTRO III in Feb 2012. (there are “many” of them all the time but not of such magnitude and duration).
Italians seems to prefer boats if they are captains.
Okay Magnus,Since the Dec11 and Feb12 activities were announced together, have been counting them both as LTRO 2.
I suffered from the 24 hours bear flu yeaterday but my fever broke with a massive spike through 1304 last night. Feeling better today thx. oh ya & 1313 Lehman pivot.
HD, Glad you are feeling better
Interesting reversals recently:1303, 1291 now 1313
NATURAL GAS
Time for a short covering rally ?
Winters coming and the mild temps are over.
scottycj1 some nice information to think about. Thanks!
Hi Tony – Do you still think AUD/USD will get back to it’s old highs over the next 2 years before rolling over again which I guess would be in line with the S&P perhaps running higher into 2014?
Yes Alex
And may I just ask one thing about wave counts. You say in the update that Wave 5 (in this minute 5) can now ‘reach any level it needs to complete this wave’. This means Wave 5 can be the longest? Is it the rule that if Wave 3 is longer than Wave 1 then Wave 5 can be longer than both of them? Thank you.
Alex,Correct.The rule is simple.Wave 3 can not be the shortest of 1-3-5
I think perhaps we have the wave 4 of minute 5 today from pretty much opening highs and the final rally – wave 5 of minute 5 – to end the expiry week tomorrow which would perhaps be in line with Scotty’s predicited high on the 22nd (Sunday).
I always read that markets have a habit of hanging up into expiry!
Minor 4 happens next week into the GANN turn date 26-27 and then we begin Minor 5 to new highs towards the end of Feb with the potential target of 1360 that people have been mentioning frequently.
Job done!
P.S. I have been early shorting (though not in big size). Error!
thanks Alex
Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!
Tony the nifty party continues! (for a change our currency is appreciating against the all mighty, rs is the best performing currency this calender yr)
Hello tony and blogmates,
Its been a while since i posted my count on snp, i feel we are making a flat in B wave. Feel snp will top out at 1316 and move to 1120 levels. http://www.niftyewa.in/2012/01/19th-jan-2012-update-on-snp-500.html
thanks Vikram
Vikram – I think the counts are completely wrong on your chart.
Wave A – 1075 to 1293
Wave B – 1293 ??
We are already above 1293 .. it cant go in the same direction as A ..
Tony,we are very close to top for minor (iii)rd wave and get a sizable pullback of 30-40 points in minor (iv)th wave,before it goes to 1320+ kind of level in minor (v)th wave to complete the Primary B wave (bear count) or Intermediate wave (i) of major 3rd wave(bull count).
Joy, been thinking that as well, but it just keeps going
Tony,
The “invisible hand” of a bull market… a slow consistent grind higher!
climbing the wall of worry
Tommy, There are three SPX sectors close to new bull market highs.
Sweet! I just know internals and the A/D line have been increasingly bullish. SP 1550-1600 my EOY target. Most managers have about an 8% target for 2012. I am betting on more like 35%! Cheers!
Joy,
Think the next couple of eaves will really
clear up the count.
Tony Tony Tony thank you for your objectivity and a mind void of any bias, when you said breakout last week people questioned you, now where have they all gone? Disappeared hahahahaaaaaa, we all should listen more, that’s what even what I m trying
Happy with gap up on nifty, based on you bullish stance again it’s beneficial for traders like us to make small positions and big profits
Thanx Tony lots to learn from the master
scale in, scale out
Modesty
Tony, when I see the monthly chart it looks to me this is a fifth wave of some large corrective structure from the lows of march 09. So I wonder if this could be the fifth wave of a wave C. I’ve mentioned you the same abt a year ago. And I am quite sure someone also had the same picture and mentioned it in nov or dec of last year.
http://stockcharts.com/h-sc/ui?s=$INDU&p=M&yr=10&mn=0&dy=0&id=p31682608665&a=254275767
Mario, Five waves up until May11.
Good to hear so again =)
However, that count could be adjusted going forward….
12391 looks like the end of wave III ..from there it looks we may have three corrective waves to 10404….
I find this count very interesting because it explains why we saw five waves down from 12876 (it was wave c)
Wave V can take any form but it will have to be shorter than wave III (2777 points)
thanks Mario
Chip stocks are up “further” AH due to good earnings and guidance from a couple of bellwethers. Intel reports tomorrow AH, along with Google, Microsoft and IBM. Oh my. “IF” these tech titans have good earnings and guidance…well, you know…
even if they don’t have good earnings…
Gold’s been surprisingly strong the last couple of days. Still think it should be selling off this week.
Seems to be a slight negative divergence on the daily chart: so maybe the selling will start tomorrow.
I’m fairly confident the weekly RSI bottomed at the end of last year; but in Primaries I and III at this stage the price bottomed three weeks after the momentum had reached it’s low, setting up a positive divergence on the weekly chart. So I remain cautious.
Upward C and 3 Targets for DOW S&P and NASDAQ
http://www.wavegenius.com/2012/01/18/elliott-wave-forecast-video-for-1-19-12-upward-3-and-c-targets-for-dow-spx-and-nasdaq/
I was long T Bond futures until today. As posted on Avid Trader I was going to terminate the trade yesterday or today or on a trade between 146-147 basis spot futures. This trade made a little money but not what I was looking for. I will look to to get short T Bonds Thursday or Friday on a low risk trade of one point or less looking for a low in March of 125-130. The fact that the futures did not trade 146-147 adds to my bearish feeling about this market.
thanks Bill
Hey Tony,
Market Map–New
Published tonight
http://markethighsandlows.wordpress.com/
looks quite positive Scotty
Yea man, it’s no time to be a bear.
seems like 200 points ago was probably the time to not be a bear
RC, Not quite 200 points ago … but a good rally afterwards nonethelesshttp://caldaro.wordpress.com/2011/10/06/thursday-update-301/
on the money!
Looks like minute v forming ED. Lets watch to see if 4 of v overlaps 1 of v.
Tony
Wow this is some Santa rally. Quick question: can any of your bullish wave counts make an intermediate 1 top at these levels?
Not yet Jason,Could be some trouble getting thru 1313-1327.After that there would be fairly clear sailing to the 1360′s.
ASTRO January 18 2012…
http://astrofibo.blogspot.com/2012/01/astro-january-18-2012.html
ASTRO Moon Cycle…
http://astrofibo.blogspot.com/2012/01/astro-moon-cycle_18.html