SHORT TERM: gap down open market rebounds, DOW -30
Overnight the futures market gapped down, and was as much as 20 points lower from friday’s close. Asian markets caught the brunt of that selling -1.6%. When Europe opened the futures markets were already recovering and they ended +0.6%. US index futures remained moderately lower heading into the open, and the market gapped down to SPX 1364. The SPX had closed at 1369 on friday. The market immediately tried to rally and hit SPX 1370 by 10:00. Another pullback to retest SPX 1364 ended by 10:30, and the market rallied again. At 2:00 the market hit SPX 1374, and then started to pullback. At 3:00 Consumer credit was reported expanding again: +21.4 bln vs +8.7 bln. Just before the close the SPX hit 1368, then ended the day at 1370.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.05%. Bonds were flat, Crude slid 60 cents, Gold dropped $4.00, and the USD was higher. Support for the SPX remains at the 1363 and 1313 pivots, with resistance at the 1372 and 1386 pivots. Short term momentum rose from extremely oversold on friday to neutral today. Nothing on the economic calendar tomorrow.
Overnight the SPX was down as much as 20 points, but recovered to open down five at SPX 1364. With an extremely oversold short term condition, a retest, and right at the OEW 1363 pivot Minor wave A may have ended. Minor wave B, underway now, could have ended at today’s high, SPX 1374. Short term momentum hit neutral, and the 10 point rally was certainly sufficient if this is going to be a steep decline, i.e. SPX 1422-1357. If this Minor B wave shifts from simple to a bit more complex it could rally back to the 1386 pivot. Either way, when it concludes Minor C should take the market lower.
Short term support is at the OEW 1363 pivot, and SPX 1340. Short term resistance is at the 1372 and 1386 pivots. The short term OEW charts remain negative from SPX 1395 with the swing point at the 1386 pivot. Best to your trading!
MEDIUM TERM: SPX/DOW uptrends weakening, NDX/NAZ downtrending
LONG TERM: bull market
15pt intraday rally in SPX. As a master of stating the obvious, that would be greater than the previous/recent 8-9 point rallies we’ve seen. Anybody have any [new] thoughts here?
And in the unlikely event anybody missed my credit mkt updates recently, I have been busy moving to a new job. So just been really swamped getting up to speed. Hope to be a more regular contributor again soon. Cheers, rc
RC, Yes we do.Good luck in the new job.Posting a slight alternate Int. C wave count today.
My cycle work, based on past cyclical periodicity, indicates next trading cycle low of S&P to be due in the May 22-June 5 time frame
This is not a prediction as I believe predictions, without exception, are absurd and futile
It is just the statistical cyclical periodicity of S&P indicates and nothing more
SPX is up 10? That’s weird
What? Nobody liked my analysis on gold yesterday? pffff fine. 
HD … we liked it =)
You nailed it
Good summary on monthly spot Gold:
http://www.mptrader.com/middayminute/5/2012/8/
NAS Buy Pullback…Fibo…61.8…
http://astrofibo.blogspot.ca/2012/05/nas-buy-pullbackfibo618.html
Lee must be busy today, his type of a day, high volatility
SPX – Looking like, just one more low/bottom below 1347….
then a rally,….watching Tony for the next move…:)
This sure is beginning to feel like a commodity flush. $CCI topped on 5/2/11 and I have 523 as a potential target. Getting close. Canadian Venture also down big since early-2011 and well over 4% today. Currently at 1333 and the October low is 1306. Sure feels like capitulation to the north of us. If you back out oil, commodities have been a losing proposition for the last year. Was crude the last man standing and its decline now marking a bottom?
Maybe Ryan, it may be.Remember it’s May again
It just seems like everything falling apart in May and into the rest of the summer just as it has done each of the past two years is the crowded trade right now. On the flip side, commodities have already been in a downtrend for a year and seems like the lighter side of the boat.
I agree Ryan. 2010 & 2011 worked PERFECTLY for the “sell in MAy and go away” crowd and EVERYONE – including myself – has been on the lookout for it again this year. This is why I doubt it works this time. Tony’s SP 1499 in July/August more likely IMHO…
from 1422-1357-1415 100% is 1350..are we there yet Tony?…+D (?)
A=C @ 1350
RC did you go long above 1343 low?
meant 1347….correction.
have not added longs yet, no. waiting for another leg down at the moment.
hah sorry. just saw what you wrote, which is essentially the same thing. cheers
cheers RC!
Waiting on the DOW CB … waiting on the DOW
thanks Tony!
what’s CB? Close of business?
I think he meant “CB” the person and nothing to do with the DOW
Got it pbnj123
This should, hopefully, get rid of a lot of gold bugs and gold-is-money-but-I-panic-and-sell crowd
This, IMHO, is time to look for that bottom in gold that has eluded so many so often this year
agree
I did some light picking. Will see how it goes
Interesting P&F Chart still show a target of $57 for SLV and $224 for GLD.
Sai
Scat,
If silver can hold here around $29 and close the week over $30 I would say there is a pretty good chance that it tests $50 again within the next 12 months. Sentiment is ripe for a bottom in both gold and silver.
I know what P&F chart you are looking at
The correct target is 222 for GLD and this count is only established but not activated. So take it as a setup. An activation will occur if the price reaches 176.
Hi Tony! Down we go…to ~1313 (SPX). Do you think gold will hold ~1600…again?
Already at $1600
Dow 5th wave ?…62% of 0-3 at 12825 ?
Igor, how are these movements in PM affecting your counts? Do you think we are heading even lower from here?
Hi blubrd,
I am still long, GLD can go lower but right now on my daily chart it is in limits of corrective pattern since September. Actually, I am expecting a rebound after this shakeout. A couple next days will be telling.
A couple of details. On my daily chart today’s plunge looks like a shakeout or a bear trap. This movement didn’t get momentum and there is still a possibility that GLD will bounced back into the consolidation zone from March. But it should go back in the next 2-3 days or the downside momentum will start building. A character of the next GLD move will be telling.
Having said that I’d like to add that it’s only my opinion, my positions are always hedged and I day-trade around a core position.
Thanks Igor, markets don’t scare you easily
I just wanted to know if we are still within your boundaries, thanks.
I would be scared if GLD broke through a significant support. Right now my perception is that GLD oscillates within a large corrective pattern. I took an adequate long position, taking into account that relatively big swings in both sides would be possible, but they still would fall within “noise” limits. High volatility within a corrective pattern is a common matter, and very often those swings don’t predict the future direction as long as they occur within pattern boundaries. For this moment I don’t see signals that today’s GLD plunge is something bigger than regular “noise”. I can easily be wrong, but for this case the risk management should be applied.
http://video.cnbc.com/gallery/?video=3000088958&play=1
http://video.cnbc.com/gallery/?video=3000088671&play=1
I feel something is going on…
http://www.cnbc.com/id/47333004
renminbi for oil trading ?
hi tony,
Hope you to be doing good? I have a question to ask you,
What tool do you use to confirm that a stock or index has confirmed uptrend or downtrend? I was referring to the below message posted in weekend update
“The first downtrend was Int. wave A. This week the DOW confirmed an uptrend, while none of the other indices made new highs. This was Int. wave B. Next we would expect the DOW to confirm another downtrend, Int. wave C, to end the Major wave 4 correction. When that arrives the market should be close to its low.”
regards
vikram
Hi Vikram, Sorry that is proprietary.
Tony – re read comments from weekend update – when you mention 1499 by July are you referring to July 2012 or 2013?
Thank you
July 2012
Wow – that will be awesome – thank you
Tony
Will this C just fall straight to the 1313 area or will there be any bounce?
Sure seems like a one way road lower?
Thank you
Should get another 10 point or so bounce
I’m inclined to go with the self-affine inverted head and shoulders pattern in Gold.
Same exact formation happened in 2006/7 inbetween the peaks of Major 3 and Int iii of Major 5.
The Int ii low in 2006 looks a lot like this low, with a mini inverted H&S, forming the centre of a larger inverted H&S pattern.
Given that we’re at the same point in the Elliott wave cycle, it seems highly probable to me that this is what we have. So I’m keeping my long position for the moment.
N.B. Forgot to mention that in this case the Int ii low is the right shoulder; whereas in 2006 it was the head, but it doesn’t really make any difference to the pattern.
value portfolio A is down 5.062% from the close of 5/02/12 versus 2.28% for the spx (s&p500) mostly due to $tpx’s 14% decline today. $tpx was closed out in the medium risk folio but will be held in the value folio A as it is even more undervalued as of today.
i’m guessing wave 5 of current c wave to find some support at 1350-1355 spx levels and to perhaps halt the decline, we’ll see.
Since you guys good the current correction right I will give you the benefit of the doubt that the commodity bull continues
Gold and Silver COT reports.. on a different note, I do like the very bearish sentiment for the precious metals off late.. the more the better..please keep them coming.
http://www.safehaven.com/article/25334/gold-cot-cftc-commitment-of-traders-for-period-425-51
http://www.safehaven.com/article/25333/silver-cot-cftc-commitment-of-traders-for-period-425-51
sai
Monday’s Market
http://5wavemodel.blogspot.com/
In the spirit of taking on the challenge. I think gold looks alot like crude. I have neither currently and can care less if I’m wrong. Just what I see.
WOW! Just like crude. U guys have a good one.
EDR Buy Pullback…Time Ratio…61.8…
http://astrofibo.blogspot.ca/2012/05/edr-buy-pullbacktime-ratio618.html
I agree with Tony that today’s move may have been sufficient for a correction from Friday’s(my wave 3) low. This is how I see the rest of the correction from 1422 playing out.
http://chart.ly/hjmyxeh
thanks 5wave
That is a unique, descending pattern. But it makes more sense than
calling the 1363 low today, a trading low. I tend to like Tony’s weekend
analysis. And, my Bressert Cycles are still in a decline mode, so the push
to the upside is suspect. IMO. I did like you lower low concept though,
as there is a projected low June 26th…..
Thanks Bud.
It is a unique pattern, and on its face appears unlikely. It is based on the wave relationships I’ve been developing, and I can only say that it is the most likely scenario I see at the moment. I, too thought Tony did an excellent job wih his updates making a case for his viewpoint. I’ve said in the past that although my wave counts look very different than OEW, they seem to converge at major turning points, That may yet turn out to be the case. Besides, I am nowhere near 99.9% sure or accurate about anything, let alone the market, The market has a tendency to do the unexpected, so we’ll see how this plays out.
Thanks Again,
Steve
ASTRO Update Moon Cycle…Next High…
http://astrofibo.blogspot.ca/2012/04/astro-moon-cyclenext-high.html
XAU Buy Pullback…Time Ratio…23.6…
http://astrofibo.blogspot.ca/2012/05/xau-buy-pullbacktime-ratio-236.html
Caught your comment, Tony. SP500, does look like a minor B wave up.
But, we are a long way from projected lows, ie 1325, etc.
I have a change in trend date of May 14th. Maybe Miss market will bring
a low, in earlier than that….Bud
Bud, SPX dropped from 1415-1364 (51 points) in four days.Fifty-one points from 1374 is …
Yep, see your point. Thanks, Tony.
Thanks Tony
I have the feeling people are tired of talking about this market let alone try and trade it.
Everybody wants to be right all of the time now it seems which seems strange to me.
I loved the struggle ..the challenge of the whole thing.
U guys can have ur 99% success rate.
I had success because I was willing to get laid out every once in a while and not because I was smart or good looking even though I am both.
I’ll talk to ya soon !
Lee, Probabilities, probabilities and experience.
Thanks for sharing Lee. Being right all the time only works if you are Flyod Mayweather Jr.
Floyd
Lee thought Crude bottomed right before the $10 spanking last week. Will I take another crack at it?
Can’t wait just trying to figure how big a bat I will use next time
Congrats Lee! C’mon you’ve got it all…enjoy and count ur blessings
)
Well said. The challenge is what it’s all about. I don’t think there are a lot of daily players here though and that’s ok. Besides if your tired of talking the markets there is always guitars. http://www.youtube.com/watch?feature=player_embedded&v=Wy5xfz6Kw-8
Thanks Tony. Isn’t that large consumer credit increase “shockingly good?” Do you think it might dissuade the fed. from doing another QE/or extending the Twist past June?
CB, Two different questions. 1. The FED is watching the indicators plus the PCE.If that contracts, which it has not, they’ll push the botton. 2. There was a special meeting last week between the FED and the Banksters.While nobody mentioned it, I think it was about Operation Twist … the builders were leaders that day.The FED knows housing is a key component of total employment.Banks have been quite tight on the mortgage side.Maybe the FED will do what Chubby Checker did … Let’s Twist againhttp://www.youtube.com/watch?v=H7_pX_raPHs
Tony, almost everything I know abt the Fed’s MO I’ve learned from you – so thanks very much for that. And it’s all just as important as any charts b/c “the Fed is kind of a big deal. ”
And that song, well it’s just perfect isn’t it..people seemed so dang happy in the 50-60s… what a joy to listen to and watch…I think “I’ll have another one ” – another listen…. =)
I’ll Have Another … won the Derby
The Eisenhower – Kennedy era came after the last Crisis period.We’ll get another run through it after 2020.Just hang in there.
yeah, the best name won…well I’ll try to hang in there but after reading Lee’s post it’s gna be tough – because I s**** up royally, my life is (below) average and I always have more questions than answers…that sucks
..well I’ll just run over to Lee’s post and congratulate him on his happy life -that should make me feel better..
Cb something for you
http://www.dailyom.com/articles/2012/33378.html
Sai
yes, very true, really….life as we know it…thanks Sai. U are a kind and giving person. Very nice of you to post this link.
Nicely put. Thanks Tony.