SHORT TERM: monthly payrolls report disappoints, DOW -168
Overnight the Asian markets were mostly lower -0.8%. Europe opened lower and closed -1.9%. US index futures were relatively flat overnight. At 8:30 monthyl Payrolls were reported lower than expected: +115K vs 120K, but the Unemployment rate dropped: 8.1% vs 8.2%. The market gapped down at the open and continued to decline. By 10:00 the SPX broke below the OEW 1386 pivot range and continued lower. Around 12:30 the SPX hit 1368, bounced to 1372 by 2:00, then remained in that range into a 1369 close.
For the day the SPX/DOW were -1.45%, and the NDX/NAZ were -2.35%. Bonds gained 15 ticks, Crude tumbled $4.05, Gold added $6.00, and the USD was higher. Support for the SPX drops to the 1363 and 1313 pivots, with resistance at the 1372 and 1386 pivots. Short term momentum is once again extremely oversold. Last night the FED reported a decline in the Monetary base and the M1-multiplier. Today the WLEI dipped into economic slowdown territory at 49.4%.
It is early May again. Seasonally, during this bull market, it has not been a good time to own risk assets. Today’s action in the Crude market reminded me of the first week in May, during 2010 and 2011, when commodities across the board were sold off. Since many commodities, this time around, have already been in downtrends for a few months the impact was not that noticeable as in the past.
For the second time in two days the market reacted negatively to a negative economic report. On thursday it was the ISM services decline, and today it was the Payrolls report. If you recall, on tuesday the market soared to SPX 1415 after the positive ISM manufacturing report. This market has certainly become news sensitive again these days.
Today, the market gapped down at the open and traded down to SPX 1368 before it started to stabilize. The six day rally, from SPX 1359 to 1415, was nearly totally retraced in just three trading days. The bias, as long as the rallies remain under 10 SPX points, remains to the downside. The market has taken the most probable OEW direction: an Intermediate wave C down. We’ll cover this, and more, in the weekend update. Best to your weekend!
MEDIUM TERM: downtrend-uptrend, now downtrend likely underway
LONG TERM: bull market
By the time TOny confirms either a downtrend or an uptrend, the move is over. Notice this on the DOW recently where he discussed a confirmed downtrend a few days ago, as we were moving higher to Dow HIGHs, then he said its a confirmed DOW UPTrend… and then we topped and tanked… now we wait for a confirmed downtrend signals
So its not a knock on tony, but what I’m saying is by the time the OEW confirms something, its time to go the other way with your trade… so it lags by a long shot
That said… total whipsnap market back to the downside and My count was wrong. That said, I am a stock trader, and I have never traded futures in my life… way too crazy.. I prefer to stab in and out with swing positions in stocks where I can directly (In most cases) control my risk. Noting the SYNC pick I gave out here many days ago has rocketed higher this week regardless of the SP 500 movements… as in over 50% higher.
For those interested in playing the coming facebook hype, and believe me… the madness of crowds is going to push this to 50, maybe 60 a share easy…. buy some SVVC near 28 early this coming week… they own a big chunk of it… and fair or not, SVVC will rally big as we approach the IPO and after…
Peace
D
Dude, you need to read and study what Tony is doing here rather than simply trolling here for your victims, aka subscribers.
I’m not an EW expert or an OEW expert. But I have read and followed Tony long enough to know that during or within corrections as Tony quantifies them, A waves tend to end soon after downtrends are confirmed, B waves usually do not complete until an uptrend confirmation, and if you were to read Tony’s weekend report, you would see that he says that this C wave down should end at or soon after the time at which the Dow confirms a new downtrend.
Why have you been such an Ar$e lately? I mean, you were never a likable guy, but you were tolerable. But for the last couple of weeks you’ve been a real douche.
Friday’s Market
http://5wavemodel.blogspot.com/
Tony, any thoughts on AAPL? Any price target for this correction to end at? TIA.
Timmy, Since the top have had a standing target of $516
Thanks Tony!
Hello everybody. Could someone help guide me with natural gas and the UNG? I understand what contango can do. It’s obvious to see that you would never look at an ETF like UNG and go super long…unless. Unless you think you’re reaching the bottom of Natural Gas…right?
Could someone explain to me how low UNG could go if Natural Gas goes as low as $1.00? Could contango cause the etf to go to $0? Or would the etf eventually rebound and soar and go through normal backwardation? What if Natural Gas stays within a range of $2 to $4 for a long time…would UNG still plummet?
If Natural Gas was a stock, I would not hesitate in putting in some cash and waiting. I wouldn’t even flinch if natural gas went down to $1.00. Hell, I would probably put more in. I just don’t know if UNG is the solution for me.
I have a small position in ECA, but I want to see if I can get at it from another angle as well.
I hope this isn’t a ridiculously novice question.
Thanks,
Brent
Hi Brent, The NatGas ETF UNG historically has had major problems.Here is a link to some other ideas:http://naturalgasetfguide.com/want-to-trade-natural-gas-etf-here-are-some-to-consider/
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Thanks Tony. Huge help.
Thanks Tony,
I Went 150% short at the close again. Hope this time I get some gains (recover some of the 170 loss points)
GL
Commodity bull over? – Looking more and more like it. Typically, in an election year crude goes up until mid-year and then falls just in time for the election season. This year it has started to fall early, but it is hardly conceivable for crude to go up into the election season, for known reasons
Also, if you look at the supply situation – we are drowning in Nat Gas, currently priced at the energy equivalent of $10 per barrel of crude if my math is correct. How long can crude be at $100ish in thissituation. The new IEA reprot states China has by far the most recoverable shale gas – how long will they import oil going forward?
Thank You Tony