SHORT TERM: another gap down opening, DOW -76
Overnight the Asian markets were mostly lower losing 0.6%. Europe opened lower and ended losing 2.2%. US index futures were lower overnight, and the market gapped down to SPX 1363 at the open. The SPX closed at 1370 yesterday. The selling continued until about 11:30 when the SPX hit 1348, its lowest level since early March. With a positive divergence in place the market tried to rally. By noon the SPX hit 1355, pulled back to 1350 by 1:00, and then moved up again. In the last hour of trading the SPX hit 1366 and closed at 1364.
For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.35%. Bonds gained 7 ticks, Crude lost 50 cents, Gold dropped $31.00, 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 hit extremely oversold with a positive divergence. Tomorrow, a speech from FED chairman Bernanke at 9:30, then Wholesale inventories at 10:00.
The market gapped down again today. Taking just about everything with it except for Bonds and the USD. The decline from yesterday’s SPX 1374 high bottomed at 1348. At the low a positive divergence set up a rally to SPX 1366. We have been counting the decline from the Intermediate wave B high at SPX 1415 as a double zigzag. Int. wave A was a double zigzag, and Int. wave C is following a similar sequence. Thus far we have counted an abA (1394-1403-1364), then a B wave rally (1374). Today we should have completed ‘a’ and possibly ‘b’, of the next zigzag (1348-1366-….). When ‘b’ does conclude, resisitance at the OEW 1363 pivot, a declining wave ‘c’ should take the market down to the lows of the correction. This could occur as early as this week.
There is potential alternate count of five waves down from SPX 1415 to 1348, completing wave A of a simple ABC Intermediate wave C decline. The B wave would now be underway with resistance at the OEW 1372 and 1386 pivots. This would suggest Intermediate wave C could extend into next week. For now, we remain with the preferred count. Short term support is at the 1363 pivot and then 1340, with resistance at the 1372 and 1386 pivots. Short term momentum rebounded to above neutral off the positive divergence. Best to your trading!
MEDIUM TERM: downtrending
LONG TERM: bull market
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Sold GLD on the close, not impressed its behavior.
Although a rebound is highly possible, the downside risk for me from here is higher than I can permit.
thanks Igor. Maybe we’ll see the Bernanke bottom
/or the-shortly-after-Bernanke bottom 2morrow in…well, lots of stuff….
Thanks Igor I appreciate it
the NY Advance/Decline data today. Does not look like a great turn around in that
data – yet there has been some improvement. For example.
11:51 edt NY issues up 991, and at 3:40 edt 1090. The highest the NY
declining issues reach 2208 at 12:35pm edt that has improved to 1963
by 3:40pm edt. So you see despite the MACD having a buy look – the data
is not fully engaged to the upside, as yet.
Daily New Price highs reach 56 in last 20min, but New NY Lows at around 80.
So the new lows, outnumber the new highs, before the bell.
Bo Yu, my indicator for SP was still on a Sell as of 3:10 pm……Bud
thx Bud
SPX looks to be putting in a bullish hammer today if we close here. Nearly every bullish hammer over the last year has coincided with a [at least short term] bottom.
Hammer Time ?
haha..nice Hammer, Lee ..also a part-time gold-bug looks like (yes, that suit
)
Hey C B
Yes he was the O.G of the Gold Bugs !
lol!! Old gangsta, I presume Lee…well naughty but nice, huh?…OK, need more good music like that to get the Bernank party started../get ready 2 dust off ur DJ outfit Lee!..
)
haha i soooo hoped you’d drop the hammer on us, Lee. you never let us down
Please R C don’t hurt em ! cmon now
haha See ya tomorrow RC and thank you
no hammer time, sadly. put the parachute pants back in the corner of the closet because the last minute selloff nullified the daily hammer. the selloff is too legit to quit
MC would be disappointed
RC doing some freestyle !
Sai, hey thx for the articles. Honestly, I don’t do well with articles, news, CNBC etc. The lexicon is just too high.
Just price, pattern, and 1 indicator. Don’t trade gold very often either. Looks crowded. GL.
Tony,
Wanted your thoughts on a silver count. It appears to me that if current levels don’t hold $26 may produce a bounce but the ultimate bottom may not come until $23-$24 as I have rarely seen triple bottoms hold.
A= $49.82-$26.15= $23.67
B= $26.15-$37.58= $11.43
C= .618 x A @ $22.96
62% Retrace of $49.82 to $8.40 comes into play around $24.
Ryan, If Silver gets that low, while that count looks possible, it would be big trouble for Gold.Big trouble long term.
3 waves up in ES at 1357 ?
CL the same at 96.77 ?
I see the pos Div on ur 60 min SPX
Thanks Tony
U guys trade smart and GL !
Tony, in looking at the DJIA 60min chart – can we draw a trendline off the late Jan low
at 12529, then thru the 12710 low, which leads to the right very near todays low,
thus far….Now a similar line drawn across the recent highs, does not present a
perfect channel – thus thought – I would get your thoughts. Just tyring to think of
another wat to lock in the low, now, or later by Monday…..Bud
Bud, Nice channel.During the day Americans are buying the dips.Overnight Europeans are selling the rallies.When that ends we’ll get a bottom.
Thank you Tony….I follow….Bud
Tony and gang
SLW does it look like a buy today ? thanks
Lee,Prefer GDXJ
Ok Thanks Tony
Does GDXJ look like a buy today ?
Looked like a buy yesterday too … under $20.
GDXJ is forming a short-term reversal pattern (engulfing) on the daily.
Igor,A close over $22.50 would help.
I would be satisfied if GDXJ will close above 21 today
That would be enough to expect a continuation.
Thanks Tony and Igor
Why discriminate against NUGT?
anyone picking up gold here?
sai
http://screencast.com/t/3v6YyHhFcX2
it looks like it’s got more work to do from this b’down.
Scat,
I’m not liking the way that gold & silver are looking here. If they don’t hold here I think we are looking at $1500 gold and $26 silver in the not too distant future. Gold may bottom there but could come down to $1450. Silver could ultimately bottom at $23-$24.
12925 – 12950 is my target for this first wave up. Hope this could help.
Tony, is today’s action so far enough to satisfy the end of C wave?
Timmy, Too early to tell
thanks Tony
woof !
Don’t stare at the finger !
Hi Lee…Now you say something
)
Hey C B
I barked at the lows for yas
ESM at old support 1352-1354
guys are trapped a bit here and hoping for a break
Nice…thanks Lee! Woof must be the new ‘pivot time’ in ‘dawg’s speech’..very cool
Pivot point in ESM @ 1357 into the SPX 1363 pivot.
thats all I got
C B
I’m always available to answer questions
Most folks tell u how it is …
I tell u how it was
haaa..well whatever you tell us, Lee, you have us eating out of your hands…good for you
“woof!” Classic toots! Nice spot to bark.
haaa Toots I just saw this H D..U quit ur day job yet ? Dude
Tony, when SPX wave C was = wave A we had a nice rebound. At this moment (still watching), I am expecting a similar pattern (a strong rebound) when DJI wave C = wave A at abt 12750. Then, I will covering my short positions and go cash. At 12755. We are almost there.
Not so sure what will be next. But I still think the market will try to retest the 13050 level at some point. Maybe next week.
Would like to hear your comments.
expecting to see 12,710, or lower on DJI before a Buy….comments?
Good morning budfox, I am not buying. I would just covering. (and recovering those 170 points loss I had + hope some adicional profit). Waves are still not so clear to me.
12710 or lower is a large range. GL anyway.
Just trying to think, like Tony. ref 12,710 DJI.
NY a/d data still very negative, so not evidence
of a major reversal there, yet…
http://online.wsj.com/mdc/public/page/mdc_us_stocks.html?refresh=on
I don’t think the decline is over yet. Still looking for 1331-1325 on the SPX.
Mario … hit your DOW level
=) Triggered
Hi Tony, is there an alternate count for gold/silver? Fear is only now entering with gold having fallen below 1600.
Yes, we have a decending triangle in green on the daily chart.
Thanks Tony. It would seem to fit better given the current scenario.
Morning all,
Igor, with Gold once again collapsing this morning, what are you looking at as your downside line in the sand? I was thinking 1585 and we’re right on it. 1585 is the 76.4% retrace of 1522-1790 Dec-Feb rally.
In the credit markets, Europe is blowing up again. Spanish and Italian bonds are substantially wider, with their respective 10yrs +18bp and +13bp so far on the morning. Domestically, the IG CDX is +2.75bp this am, fairly consistent with equity futures. Bank/fin paper is holding in relatively well all things considered, anywhere from 5-10bp wider.
thanks RC
Hi RC, if GLD closes below 154, I am out.
Gold’s downtrend seems to have stalled at EMA 70, which is a significant support level.
However Int ii of Major 5 of Primary III was very severe, and tested the previous Major 4 low. So a retesting of the strong support zone in the 1520′s is possible.
My gut feeling is that EMA 70 will hold, but I guess we’ll soon find out!
SP500 Buy Pullback…Time Ratio…138.2…
http://astrofibo.blogspot.ca/2012/05/sp500-buy-pullbacktime-ratio1382.html
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EURUSD Update Buy Pullback…
http://astrofibo.blogspot.ca/2012/05/eurusd-buy-pullbackfibo618.html
GOLD Buy Pullback…Time Ratio…61.8…
http://astrofibo.blogspot.ca/2012/05/gold-buy-pullbacktime-ratio618.html
CADUSD Buy Pullback…Time Ratio…61.8…
http://astrofibo.blogspot.ca/2012/05/cadusd-buy-pullbacktime-ratio618.html
1340-1360 is a pivotal area and without breaking it, explicit liquidity guarantees may not come
Next move may be another rate cut by ECB
Seems to be a very slight positive divergence on Gold’s weekly chart now, and the lows of the last two months appear to be forming a bowl shape.
Also we have a one month cycle on the weekly RSI chart, similar to the one that ended Q3 in 2006. That cycle ended at the Int ii low of Major 5 of Primary III.
Taken together this suggests the downtrend is very near to completion, and may have completed today?
In 2006, that one month cycle formed the centre of an inverted H&S pattern, with a symmetrical distribution around the Int ii low. So I’m wondering whether this Int ii low could be the centre of a larger inverted H&S, with double-shoulders? Is that possible?
Alex, Not an avid follower of H&S patterns, or bowl shaped formations.Just the waves.Maybe some others have insights into those formations.
Timing-wise a lot of things seem to point to Gold bottoming today. I’m just hoping for a soft landing, and a swift rebound!
GL
Thanks Tony!
Tuesday’s Market
http://5wavemodel.blogspot.com/
Tony,
A = 1422 – 1357 =65 points
C = 1415 – 1348 = 67 points
It looks We may already have something: A = C… short term bottom ?
If 1348 is broken, should we look for A = 1.62 of C ? …at 1310 ??
Thx
Mario, Yes, and 1310 fits
Thanks Tony !
Two nice articles on Gold… Enjoy. Congrats to HD on nailing the drop!..HD are you one of the commercials trading PM’s?
http://www.safehaven.com/article/25353/wow-golds-wall-of-worry
http://www.safehaven.com/article/25357/gold-is-at-or-very-near-a-long-term-bottom
Sai
Tony, you have everything as downtrending now. So I think all the indexes are in sync now?
Timmy, Only the DOW has not taken out its low yet.
But my understanding was that DOW had already confirmed downtrend before. It was only other indexes that had to confirm a downtrend.
Timmy, Read the weekend update.
HI Tony; One of the modifying indicators I use (13dMA: MACD) crossed its zero line today and this blocks any STORMM buy or sell signal for 5-8 days. This relationship typically happens just before the start of B wave bounces in ABC retracements and I expect that’s what we’ll see in the next few days. So it appears from my view your alternate count is the most likley. After the B wave completes we’ll be out of the influence of the 13dMA:MACD and a new buy signal will likley develop in the second half of May.
Cheers,
Greg
disucssion at: http://hgpolites3.wordpress.com/
thanks Greg
I agree with Greg…..While it would be grea,t to see a bull run begin here.
The facts, do not appear to support such a run. Example, a true strong
reversal would have seen an Advance/Decline pularity as positve, not negative.
SP did not close positve – etc…Thus, Tony’s description of the tecnicals
are spot on…..
Why Gold Could Be Setting Up For A Killer Comeback (or, hope springs eternal):
http://www.forbes.com/sites/afontevecchia/2012/05/08/gold-ripe-for-a-comeback-on-european-anti-austerity-us-worries/?partner=yahootix
Thanks Tony. What happened to all the horn tooters? I started dipping my toes into some longs again.
I’m usually a little early. Will remain nimble.
B
Maybe they’re on vacation
Thanks Tony, couple questions if we might hit this week than 1320area might be stretching it right? Also I was expecting aapl to pull back to 520 area but this timing for a bottom doesn’t seem to jive with that.
Maks, US market continues to display strength while most international markets are not.Today’s late rally may stretch the correction a bit more.Was/is expecting $520 on AAPL too.
thanks Tony, fun times
Thanks Tony, it is very interesting how waves get more clear now. I almost covered my short positions at 12825 (I sugggested wave 5 = 62% waves 0-3).
Expecting 13050 to be restested.
GL
Watching these supports. 780 (R2k), 2900 (NAZ), 12876 (DJI).