SHORT TERM: gap down opening, DOW -204
Overnight the Asian markets were lower: -1.3%. Europe opened lower and declined even more: -3.0%. US index futures were lower overnight, and the market gapped down to SPX 1354 at the open. The SPX had closed at 1364 yesterday. The market continued to decline until about 10:30 when the SPX hit 1344. After a rally attempt failed at SPX 1348 the market headed lower again. At 2:30 the SPX hit its low for the day at 1340. It then tried to rally, hitting SPX 1345 before the close, and ended the day at 1343.
For the day the SPX/DOW were -1.55%, and the NDX/NAZ were -1.20%. Bonds gained 16 ticks, Crude dropped $1.85, Gold fell $30, and the USD was higher. Support for the SPX drops to the 1313 and 1303 pivots, with resistance now at the 1363 and 1372 pivots. Short term momentum dropped to extremely oversold after hitting neutral yesterday. Tomorrow, the ADP index at 8:15, and Consumer credit at 3:00.
As has been customary during this bull market, the SPX gapped below important levels this morning, bypassing 1358 and 1355 on the way to a 1354 open. SPX 1358 represented the maximum pullback level during a Minor wave rally in this uptrend. And the SPX 1354 level represented a reversal of the rising weekly trend. With the SPX declining to 1340 today the decline from 1378 is now larger than our Minor wave 4 pullback of 33 points. While some debate goes on between the primary SPX count and the alternate DOW count, we note the following. At the SPX 1378 high all but 1 of our 20 international indices were in confirmed uptrends. As of today, at least 6 of the 20 are now in confirmed downtrends. We have not reviewed all the charts yet. Europe has led during the uptrends, and now appears to be leading into another downtrend. If this scenario is correct, we would expect the SPX to find support, in the next few weeks, between the OEW 1261 and 1291 pivots.
Short term support is at SPX 1337/41, 1321 and then the 1313 pivot. Overhead resistance is at the 1363 and 1372 pivots. Short term momentum is again extremely oversold, as it was early yesterday. Thus far, we can count a small abc down from 1378: 1364-1376-1340. Best to your trading!
MEDIUM TERM: uptrend may have ended at SPX 1378
LONG TERM: bull market
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987
.50% weeks high to low 1352.75 ish ESH
Rollover Cometh
If u bought the little white box yesterday this is a good time to scale out IMHO. GL
Friday could be the low.
Thanks H D
The algos gave em the business today as usual.
good stuff
54′s would be nice w/cash discount set up.
H D
AH should be the trade to make some $ short
Thanks H to the D
You guys have a great day !
I’ll be freaky tonight for sure!
Ok, my $USD charts are back, fwiw.
60 min http://screencast.com/t/HH0WuxdcuUA
daily http://screencast.com/t/HH0WuxdcuUA
sorry, this is the daily http://screencast.com/t/GlWPlpDF
Tony what are your thoughts on the $usd? Sorry I can’t post any charts right now, but iy looks like it has a tripple TL Resist. at around 80, and a double -top on 60 min maybe? Thanks Tony.
Is anyone buying ZC on this pullback? Thanks.
Hey C B
maybe at 615 ish ? in ZC
oh my, that is scary Lee. I am hoping that that daily TL at ca. 631 will contain any further selling overnight ahead of that report tomorrow. Well, maybe that’s just a dumb assumption on my part. Thanks Lee, appreciate ur help!
still bullish above bearish below 655 on C&W
CB, Good question.Looks like DXY will be heading in to the mid-80′s over the next few weeks.
Thanks Tony. That;s pretty tough
Thanks for the numbers HD. OBV on ZW looks bearish but pretty bullish on ZC, or so it seems(?) http://screencast.com/t/6ECcAexG3sE I am not sure whether I recall what I had read correctly, but someone was writing about playing seasonal premiums of zw vs zc and the premium was going to be the highest in favor of CZ during like the 2nd week of feb. because of the highest uncertainty with ZC (that is where the seed is in the ground). I am just playing the long ETFs, with (very mixed) results
Upward .618 and .786 for NASDAQ
http://www.wavegenius.com/2012/03/07/nasdaq-visual-5-day-chart-upward-618-and-786-targets/
PP is 1352 in ESH
New sellers just came in
If theyre not right here I will sell into their buy stops hopefully within 1363 pivot area…would be a very good R/R
1350.50 = 23.60 % year high yes low
CL a totally dif story
thanks Lee.
Your welcome CB
Throw over here in ES …Bears ball
AAPL the bad guy for the bulls today
It looks 1360-1365 may be the target for the rebound. minute b, Tony ? …
would think so Mario
Upward .618 and .786 targets for S&P
http://www.wavegenius.com/2012/03/07/sp-visual-10-day-chart-upward-618-and-786-targets/
Good morning Tony
What are the chances that this correction ends up like the one in Nov 2010 (ie very shallow)? The broader market setup/structure seems similar.
Thanks!
RC, Nov10 was only a pullback within a seven month uptrend.With, currently 10 of 20 international indices in confirmed downtrends, it would be quite a surprise for the US to avoid one.
Tony would a bounce to 1370ish be realistic before we continue our correction
Pooch, since the first bounce was only 12 points, that would be a surprise.But getting within the range of the 1363 pivot would not.
thanks tony
what do you think about A having ended at 1340 yesterday?
Seems too short
it does seem short. if we rally back to, say, 1360, then to get down to a ~1298 level would require C to be 1.618x A. 2x A would get us down to 1284.
RC, Counting this as an Intermediate wave ii correction.Would count 1378-1340 as a Minute a.A rally to 1360 would probably fit a Minute b.Then the next decline should be a Minute c, ending Minor A.Still would have Minor B up and Minor C down after that.This should take some time to unfold, we’re only in the first week.
understood. thanks!
RUT Reversal…Time Ratio…61.8…
http://astrofibo.blogspot.com/2012/03/rut-reversal-time-ratio-618.html
Watching the same charts:
The one suggesting NDX going up to 3100-3150 and spx up to 1630…
1. http://stockcharts.com/h-sc/ui?s=$NDX&p=M&yr=13&mn=0&dy=0&id=p03475453942&a=258568990
The bearish charts. Both suggesting an important selloff may unfold in the coming months
1. http://stockcharts.com/h-sc/ui?s=$NYA&p=M&yr=13&mn=0&dy=0&id=p90338799719&a=258089896
2. http://stockcharts.com/h-sc/ui?s=$OEX:$USD&p=M&yr=20&mn=6&dy=0&id=p20300766759&a=258090209
= Inflection point.
The End of the Correction? Or a Pause?
http://5wavemodel.blogspot.com/
small bounce here into Thursday. Turn on the 8/9th and down into the 16th and major Bradley Turn Indicator which should complete the 90 day cycle. After that onward and upward to 1500 like Tony was suggesting might happen.
W4 bottom low hit all in one shot in DOW S&P NASDAQ?
http://www.wavegenius.com/2012/03/06/elliott-wave-forecast-video-for-3-07-12-w4-bottom-hit-all-in-one-shot-in-nasdaq-dow-spx/
Hi Tony Both Sp500 hourly charts (http://hgpolites3.wordpress.com/) illustrate how the recent price has fallen out of the bearish rising wedge and started a decline for the SP500. This similar pattern was initiated earlier by the Russel and Transp and if the SP500 follows we would thenexpect further downside price action. The 15day hourly contains an SP500 Elliot wave count with wave 3 of some degree ongoing today and will probably complete tomorrow. A wave 4 bounce either Wednesday or Thursday this week followed by a 5th wave decline to close out the week. From your interpretation you’re call ing this an A wave? The SP500 20dMA displays the support zone if this is a normal retracement between SP1291 and 1220.
Looking forward to your comments, cheers, Greg
Hi Greg, Yes would expect the first decline to be an A.Then a counter trend rally, followed by a C.SPX 1300-1333 looks like a good area to end A.
ASTRO Moon Cycle March 6 2012…
http://astrofibo.blogspot.com/2012/03/astro-moon-cycle-march-6-2012.html
Thanks Tony
At this point my ES calls this year could be at par with Bob Uecker’s lifetime batting average.
It’s my pleasure to make observations in real time and at no cost
Uecker didn’t need to hit, his charisma carried the team
Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!
Nice! Lee’s got plenty of that. Pivot calls are a bonus
Tony,
The RUT fomed a major 1 peak in late October then a triangle before breaking down in major 2 (61.8% retracement). Assuming major 3 topped at 833.02 on Feb 3, the RUT then formed a flat and is leading the way down in major 4. It’s interesting that both the triangle and the flat are typically continuation patterns rather than reversal patterns — quite deceptive.
My question for you is what type of corrective pattern do you expect now for SPX in major 4? Five waves down, A-B-C, or something more complex?
Radian, Not expecting Major 4, but Intermediate ii.The pattern will probably be a zigzag like Major 2.
I’m not an EW person and I use a non-directional trading strategy (iron condor). I do try to closely follow inflection points and price/time targets to assist my trading. Thanks for your help.
Understood.Wave nomenclature can be confusing.
Hi radrian,
If the SPX will behave as Tony thinks it should, it’s better to use bear spreads IMHO.
Igor,
My holding period is eight to nine weeks and the RUT generates a number of twists and turns in that timeframe. Regardless, I only need to adjust my initial positions 15% percent of the time so I have no complaints about the strategy. Bear spreads are fine for a trade but I use iron condors to systematically generate income in three separate accounts. I’ve found the iron condor is manageable in all market conditions and I’ve used the strategy every month since January 2009.
Radian what of kind of return do you get in IC’s?
Thank you radrian,
sure, whatever works best for you. I apologize for the suggestion, I just get used to apply spreads with a directional move. Cheers.
Igor,
No offense taken — I manage three accounts and it’s simpler to use a more generic method that does not require a lot of trading.
Scatman,
I’m currently averaging 15.6% per month return on risk.