SHORT TERM: gap up opening, DOW +20
Overnight the Asian markets were mostly lower: losing 0.5%. Europe opened higher, dipped, then closed up 0.5%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 367K vs 365K, the Trade deficit rose: -$51.8 bln vs -$46.0 bln, and both Export (+0.2% vs +0.5%) and Import (+0.1% vs +0.5%) prices declined. Then at 9:30 FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20120510a.htm. The market gapped up at the open to SPX 1361 and continued to rally. The SPX had closed at 1355 yesterday. By 10:00 the SPX hit 1366, tuesday’s high, and then began to pullback. Around 11:30 the SPX nearly closed the gap when hitting 1357. It then rallied to SPX 1362 by 11:30, pulled back to 1357 again by 12:00, and started to rally again. At 1:30 the SPX hit 1365 and began to pullback. At 2:00 the Budget deficit came in as expected, a surplus: +$59.0 bln vs -$40.4 bln. Heading into the close the SPX closed the gap at 1355, then bounced to close at 1358.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were -0.10%. Bonds lost 4 ticks, Crude slipped 5 cents, Gold rose $3.00, and the USD was higher. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum remained around neutral for most of the day. Tomorrow, the PPI will be reported at 8:30, then Consumer sentiment at 10:00.
The market broke the streak of four gap down days in a row today, with a gap up. The rally carried the SPX back to tuesday’s high at 1366. In fact, the highs for the past three days have been 1366, 1364 and 1366. The OEW 1363 pivot. There is a short term count suggesting all the market activity from tuesday’s SPX 1348 low could have formed a B wave contracting triangle. With the three hits at the 1363 pivot as the a-c-e waves. The lower uptrend line, in this potential triangle, has already been broken to the downside. If it is the current working count the market should immediately head lower. Overall, we are still expecting the market to make lower lows before this correction ends.
Short term support is around SPX 134o and the 1313 pivot. Overhead resistance is at the 1363 and 1372 pivots. The short term OEW charts remain negatively biased from SPX 1395 with the swing point now at the 1372 pivot. Best to your trading!
MEDIUM TERM: downtrending
LONG TERM: bull market
1349.75 = 76.40% from the days high.
day longs just got stopped out now its how shorts will be treated.
There’s buyers comin in 52′s.
no squeeze. Have a G1 Tony and all.
treat ur momma right this weekend!
et tu HD
I love my Mom !
Thanks H D !
Important “pivot” day today? Over 125 RESPONSES on the Caldaro website? (Top 10 Indicator)
Mike
I think the records 200 + It’s usually a good day when someone tells me to go stuff it and that hasnt happened yet so……:)
Go stuff it Toots!
Thanks Mike !
Mike, if we get over 150 it could get interesting
mine are fully erasable, Tony..just try…that’ll reduce the ttl load by …let’s say 50..
hahaha CB,Usually market turning points occur over 150
haa…nice Tony, you’ve said it so it’s must be an objective fact and we need to take it very seriously…Thanks guys! Lee, HD ur right up there with those super algo bots with ur skills!!
)
CL 15 cents from pit low ..Toot !
ES shorts pressing and the dip buyers bought 1356 ESM
.618 back from the R1@ 1363 to days low @ S2 1345.75 =
1352.25 ESM which is also old support
sell stops are below….fo sho
See yas at the closes
It will either be at the low or high of the day
ABC down into H D’s HWB ? ES/SPX
MA 34 also as he mentioned
lol…that was a very nice ‘toot’ Lee, since you gave HD credit… a “friendly toot”
Some tweet, we toot
DAX Sell Rally…Time Ratio…138.2…
http://astrofibo.blogspot.ca/2012/05/dax-sell-rallytime-ratio1382.html
SP500 Sell Rally…Time Ratio…138.2…
http://astrofibo.blogspot.ca/2012/05/sp500-sell-rallytime-ratio1382.html
COMPX Sell Rally…Time Ratio…138.2…
http://astrofibo.blogspot.ca/2012/05/compx-sell-rallytime-ratio1382.html
1359 is HWB for the week. MA34 and keeps things interesting. IDK
Finish up ur lunch and let’s give em “THE BUSINESS”
that’s our new blog slogan courtesy of Toots.
Forget what I say what David says or what anybody says..heres the best advise for a trader in these markets
a good one Lee, thanks!! amazing that as kids we actually survive our childhood after our self-esteem gets battered so much…and then …we grow up (and it gets worse
….we turn into whimps…and can’t make any mistakes any more…conclusion? good traders are either child-like..or have very good algos..
Nice C B !!!
CB – so well put and spot on
Hi pbnj, well I am still a stubborn whimp with a bad algo..now what
And then there is the “watching grass grow” part also…which turns even the happiest kids into borning adults 
…Lee can you teach us how to maintain enthusiasm over and over and over again?
Thanks for this. I needed this today. Trading is more about our own phycology than anything.
B
pain is weakness leaving the body. Mistakes happen, always move forward. Or trade bigger
haha..HD…bigger until ur like JPM
“always move forward. Or trade bigger”
HD lol Martingale betting system?
Yep. It’s the mistake I make all the time. Whoops, early, add. I think the “pros” call it scaling in though.
At the end you can always say that it was a loss in a hedge position
Thats right Igor !
is it successful Igor? In any case what ‘s good about the strategy is it’s got a well-defined “end”–when all ur additional funds are already being used…
CB, it’s statistical approach. You have to be as big as JPM, though, to sustain big draw downs.
http://en.wikipedia.org/wiki/Martingale_(betting_system)
I must add that markets have “fat tails” and this approach can be a straight fast way to bankruptcy.
thx Igor. Kinda crazy..you need to be big enough to do it but you cannot become big pursuing that kind of thinking…well at least we talked about it and we understand why HD put
after “trade bigger” right? …. those casino limits are a good decision though proving that if enough people combined resources and conspired to apply this and played long enough they could wipe out a casino…
I forgot what book I read, but it describes that “pros” gamblers wait for a relatively long series of similar events to occur (for example 5 “red” in a row) before starting to apply Martingale increasing odds in their favor.
Lesson: if you see that something is oversold, wait till it becomes extremely oversold and a little more before starting buying
interesting..well what scares me is that I am familiar with that type of psychology (hmm
and have been in a few situations where I pretty much knew what my extreme downside was so I would hang in there…but I don’t like the idea of adding money to a bad situation..it’s the kind of psychology that is more useful in other areas of life, or professions, not in trading…saving people or animals out of hopeless situations, maybe…fighting some really bad odds..kind of sounds like a challenge to me…but not with money…
You are absolutely right. Not in the market. As I said the markets have “fat tails”. It ruined LTCM in 1998. And it has two Nobel Prize laureates as advisers.
yes, well they didn’t even get a chance to learn their lesson bc they played like God, and God (A.Greenspan) was right behind them to bail them out…the smartest guys in the room needing to get out of their own way…one of them has a hedge fund again these days , I think
)
well, we really need to heed what Lee always says…humility, humility
The 163 pivot dance continues… Not a healthy candle on the 60 min though.
if we’re doing: 1/TL breakout, 2/the re-testing the b’out, maybe it’s not sick at all… http://screencast.com/t/iR4lK2DxhT jmho, and I was wrong on copper just yesterday…so fwiw
meant..2/then re-tesing the b’out..sorry …MACD looks like a monster though
good call on that ugly candle RJ; it really was ugly and you spotted it early!
I am biased toward the “inv. H+S” intraday /”glass-is-half-full” thinking today.
Like MFRM at 35-36 range, PO is back to old highs…Bud
Like NOV at 68-69 levels….
Looks like equities are going to try to make a run at it. Let’s see how sturdy this 1363 pivot is
Where is David? I am missing his outlook?
sai
Sai
Be careful what u ask for
Well you know Lee you need to read between the lines..
Sai
hahaha
Fourth time, 1363 pivot, a charm?
not a fib number Tony, so yes it should work..
)
makes sense Tony
Next time I see one of his posts I’m going all short. Jk.
Well hello mr Pivot Time !
R1 @ 1363 ESM
PP CLM @ 97.12
guys who got stopped out re entering shorts here.
seems the best sells lately are at 3:30 PM CT
If it’s contracting triangle does it make sense that it’s hitting now for the 4th time 1363 pivot? Or do you see something else developing today?
especially since lower uptrend line was broken yesterday, yet it’s up-trending again pretending nothing happened.
If it walks like a triangle and talks like a triangle…….
Tony ur pivot is giving this market “the business” JPM and we rally? It’s heads they win, tails we lose.
H D
Its mad people trading angry today
HD,Wild day for sure
Tony, what are the odds that the bottom is in? Market has held up admirably well.
Still see that as unlikely
The important question is whether there is enough liquidity to take the market for a good run up
1340-1360 is a pivotal area and without breaking it, IMHO, there will be no need for any liquidity provide just to help S&P and S&P would be viewed as happily consolidating on its own
may be the correction is over or maybe it gets another ABC to land in the same pivotal area of 1340-1360. It does not matter. The ensuing run, IMHO, will run out of ammo and will very likely have weak momentum and breadth
The important thing is liquidity supply. Is there enough for another run from here? If not what would force someone to supply it?
mayvbe the correction is over
LTRO 3
I am also thinking that, if it comes, it will likely come from Europe whatever the acronym slapped on it
how bout using those goldbugs for liquidity, Ben and Mario?
morn
To say folks were short ESM this morn is an understatement
Theres ur 10 handle range… 1356 *
cheers Lee!
Good eyes Lee.
hahaha H D I dont need to tell u
lets see …1357 is the Pivot point in ESM today
Globex high hit @ 1358
everybody who sold em today are stopped out above 1356
The 1362 pivot is giggling
Lee – not sure I follow
pbnj123
dont chase.
Ah – thank you – still learning – you guys are great
pbnj123
So am I
Keep asking questions
me too
I am moving a bit lower the trigger point for my conditional orders. I have another addicional alt count in mind. This may be a tricky market today and monday.
Have the same thoughts. 12749 (DOW) and 2900 (NAZ) are the crucial points. BUT I still think we need to see another wave up before these supports are decisively broken.
If the DOW is able to rebound above 12931 today Then, I will be looking for shorting the market. Otherwise, I will remain in cash even if the DOW makes a turn aorund and close at abt 12749. The conditional order will trigger only if 12749 is decisively broken.
Thats all for today.
GL and thanks again.
Thanks Mario
I like plans
=)
Morning, all. JPM has been grinder tighter this morning, almost to the point of unch’d vs. before the headline last night. Pretty impressive dip buying really.
In other news, does the modest PPI give the Bernanke a little more leeway in his fight to re-inflated? Speaking of, Gold has only seemed to go down lately. Acting like it’s a one-factor trade: QE-on, QE-off. Seems like it could wallow until June.
thanks RC
rc – forgive me for asking but as for JPM what are you looking at – I have down over 8%
sorry for the confusion, peanut butter and jelly. i trade credit. was referring to JPM bonds, specifically the 2016s and 2022s. they blew out about +15 to close out the night yesterday, but have retraced nearly all of it in morning trading today. the equity… well, can’t speak to that. that’s what i come here for! cheers
that’s +15bp, or about -1.3 points on 10yr dollar price, for the non-bond math minded.
Oh – awesome – cheers
Thursday’s Market
http://5wavemodel.blogspot.com/
Tony
I find your analysis this week on the abA-B-abC counts for Major 4 (preferred and alternate) amazing…..
My calcs show for your preferred count a of abA=1364, b=1374, that C=1325 if C=1.382xA or C=1323 if c=a, OR C=1310 if C=1.682xA;
Or for an alternate count of a=1348 of abA, b=1366, that C=1324 if c=0.618xa OR C=1298 if c=a.
Both preferred and alternate counts seem to match well with a 1305 to 1325 final range for Major 4/ abC.
Appreciate your insights if these counts seem reasonable to you….
Thanks for the great work and alternative insights!
Hi Newbie, After the decline to 1348 the short term count became a bit vague.So there are many different potential solutions as this time.Including those you noted.Looking for a few technicals to align before we do bottom.cheers!
I am moving a bit lower the trigger point for my conditional orders. I have another addicional alt count in mind. This may be a tricky market today and monday.
Have the same thoughts. 12749 (DOW) and 2900 (NAZ) are the crucial points. BUT I still think we need to see another wave up before these supports are decisively broken.
NAZ 2900 and DOW 12749 : The line in the sand for tomorrow….let the condicional orders work for us
GL …see you tomorrow.
Wow Tony must be clairivoyant(probably spelled wrong) “With the three hits at the 1363 pivot as the a-c-e waves. The lower uptrend line, in this potential triangle, has already been broken to the downside. If it is the current working count the market should immediately head lower. Overall, we are still expecting the market to make lower lows before this correction ends”. Thank you JPM
Vix – not being mentioned often anymore – yet, it sure looks more positve – from a Bullish
divergence perspective than the comversation is moving toward. Mood, has moved
to negative – but the VIX – look at it.
About 4/10, hard to be exact – VIX make a High, 21.06 and very overbought, as
Tony would say – then – we get yesterdays high of 21.59, slightly higher,
but – the Bullish divergence is clear, at least to me.
SP500 futures – well my count – and Ha – a very weak talent – suggest that the recent lows
of the 6ht was 1342 low. Was a W3 low, and the W4 was 1363. So, my thinking is
we drop to 1335 and call it the low, by next Monday, and go higher into Op Ex time frame…..
yes Bud, negative divergence on the VIX … reason for rally?
well, Tony, it is a momentum call at best. the crest of that push using your RSI
5 appears to be early April @ 21.06, then on the Vix when higher, 21.59
on a weaker RSI crest. It sure appears to be a divergence that looks favorable
for a low – late today – the VUSTX fund, began to decline by 3 cents, it too, appears
to be a possible new short term trend toward – those investor – fearful holding Treasuries
may feel time to flp to higher yield, aka Fagix fund. The ratio of the FAGIX:VUSTX
is the Confidence Index – it turned higher today. Confidence Index, often leads,
sometimes by many months – ala 2007 to was in the spring, but it does, warn rather well.
SP futures already hit a low of 1344 within the last hour.
I have a CIT date of the 14th.
The $NYMO is terribly Bullish as well. Looking at the Old Style NYMO the
4/10 close was 1358. NYMO was -312, now yesterday we closed at 1354.
A lower SP close – but the NYMO value was -131. singificantly stronger.
On a last note – I kinda like your FCX stock right now – it to is looking Bullsih
to me….
My call is 1335 at the low,,,,by the 14th or sooner…just and avid fan Tony.
A monday, tuesday low Bud … would set the market up for the Facebook launch and Opex on friday.
meant to say – Bullish….
For Bud,check the history on this event…the 15th is venus retrograde
http://www.mcoscillator.com/learning_center/weekly_chart/?utm_source=McClellan+Chart+In+Focus+-&utm_campaign=b77545ca34-CIF_A_Seasonal_Quandary_5_4_2012&utm_medium=email
Bud, if you read Tom McClellan’s outlook, he also has a low for 14th – always interesting stuff from him.
Thanks Tony.
Interesting fionamargaret. Since, mid to late 2011. My use of the $NYMO
has been severely reduced. Since QE2 and Twist. The A/D data looks
flawed, and thus the NYMO, has also, somehow not the right look. The
most recent pattern though, does look a bit glaring, and hard to overlook.
FYI – I have found the use of 2 mutual funds, much more useful for investment
timing. FAGIX and VUSTX. And, interestingly – Tony’s work here has
had a sound stability of market timing that I like to see. Even with my own
work…..Bud
TSX Sell…Time Ratio…61.8…
http://astrofibo.blogspot.ca/2012/05/tsx-selltime-ratio618.html
SP500 Sell…Time Ratio…61.8…
http://astrofibo.blogspot.ca/2012/05/sp500-selltime-ratio618.html
Have been buy while sp500 was tanking and now from buy to sell on a dime!!
I have a sell for the next two training days…Time Ratio…61.8…
OK pressures off! Time to buy…
Perfect contrarian indicator…
See how this works ? Buy the Astro sell signals and vice versa.
CB I didn’t see your question on yesterday comments until this evening.
(Greece/euro). I actually don’t have a strong opinion either way. The European monetary system would survive a Greek exit, as the country accounts for very little in the overall GDP.
Two issues here: a) the process of swapping local currencies for the common one, is legally “irreversible” and the treaty does not include an exit mechanism.
b) politically it will be difficult for the other countries to justify to their electorate the money that has already been spent helping Greece, if they were just able/allowed to walk away.
While I don’t have a strong opinion exit/staying my instinct tells me that it will be a true long Greek tragedy but in the end they will stay in.
What worries me is Spain, and especially the banking system there. Everyone knows that their books are cooked at best.
Recently I have been exposed, for professional reasons, to the true extent of some of those banks books. If a realistic mark to market were to be applied, without any shed of a doubt, we would see severe civil unrest. (that’s why I think a proper MTM would never be applied).
There are at least 2 banks in Italy were I think the situation is a severe as the one described above. The entire eurozone banking system is kept afloat by the ECB, but I think that the size of its ever expanding balance sheet is another reason to stay alert.
The easiest solution would be for the ECB to push for a euro devaluation vis-a-vis other major currencies, and let inflation running wild/wild-ish.
This is currently a no go area for Germany, however I think in the end they will bow to the idea as it is cheaper than other options and more manageable from a political point of view.
all the best
Hi Makiori, yeah sorry for bugging you yesterday – I realized how late it was for U afterward..And thank you so much for your views . It’s always interesting to get ur perpective. Greece is so interesting, isn’t it?…on one hand they are so independent & might just leave ..…BUT the banksters rule this world and they’ll never let anyone default & just walk away if they can help it , and they know how to put pressure on countries….some folks I talked to thought that if Greece & some other “good-weather” countries were to leave the euro that would be a win-win, especially since that would mean the prospect of cheap vacations for those sun-worshipping northern Europeans (hard to argue with that, right?) …and that would also make the remaining union stronger internally……so let’s see brace ourselves for another summer of discontent …thanks Makiori …best to you & ur family !
NAS Sell Rally…Time Ratio…138.2…
http://astrofibo.blogspot.ca/2012/05/nas-sell-rallytime-ratio1382.html
What rally ?
From 2586 to 2640…
Thanks Tony! After today’s action would you expect the downtrend/correction low to be closer to 1340 or 1313?
Mike, Let’s start with 1340 and then see where we are.
Thanks Tony. The latest market moves, over the last few weeks, are like Chinese water torture. More so than normal! I won’t even mention gold (uh oh, I did).
Think the rallies show this market wants to go higher. But it needs to correct first.
Watchout for 1279
Hey Pooch
1279 in Gold ? thanks
doh ..never mind Pooch
I understand ya
Thanks for the update Tony. As an FYI, bank credit is blowing out right now with this post-close JPM headline about their sizeable MTM losses. Could be another fun one tomorrow. cheers -rc
I think we need to see another wave up before 12749 is broken
RC,Not surprising
JPM taking the futures down in AH
but not before ESM traded .618 back (pit) at the close.
These guys are good
beat me to it! (had to go buy some JPM cds before I posted… )
Heard the news ahead of the crowd
nice
Strictly speaking, I think we all read it in the WSJ a couple months ago when they were talking about “Bruno” the “London Whale” with his huge CDS bets. It was just a headline waiting to happen. As one of the traders on my desk just said, “he just went from a whale to a guppy.”
Is the knee jerk reaction sell offs of the other banks a bit overdone to you guys? It looks like a bit of panic selling of other banks, assuming they were making the same stupid bets. Thoughts?
Thanks.
Thanks Tony, I still look for one more try to the upside ..maybe an intraday wave c …for this correction to be over (I expect something like a reversal day)
If it roll over without any rebound I guess I will be shorting the market when 12749 is broken…otherwise I expect do so at higher level/price.
GL
Just wanted to note that Tom O’Brien mentioned earlier this week that John Paulson’s last 13F filing showed that he had 17 million shares of GLD December 31.(Street Tracks Trust) There hasn’t been much demand of late….O’Brien speculates that he might be in a bit of trouble. Also – GS just reiterated Gold as a buy with a 6 month target of $1840….hmmm. Paulson and GS go way back. LOL. Charlie
Paris, That’s about half of what Paulson had before the stock market melt down in 2011.If he starts adding again we’ll definitely get a pop.
Thanks Tony
Thanks Paris