SHORT TERM: follow through rally then pullback, DOW -2
Overnight the Asian markets gained 0.3%. Europe opened higher and rallied 1.8%. US index futures were lower overnight, but edged higher heading into the open. At the open the SPX hit 1319, pulled back to 1316, and then continued higher. The market had closed at SPX 1316 yesterday. At 10:00 Existing home sales were reported higher: 4.62 mln vs 4.48 mln. The market rallied to SPX 1328 by 11:00, was extremely overbought, and then began to pullback. Around noon the SPX hit 1320, rallied to 1325 by 1:00, then hit 1320 again by 1:30. After another rally to SPX 1325 the market pulled back into the close. Just after 3:30 the SPX hit 1310, and then bounced to end the day at 1317.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.25%. Bonds lost 7 ticks, Crude slid $1.35, Gold fell $25.00, 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 hit extremely overbought then pulled back. Tomorrow, New homes sales and FHFA housing at 10:00.
The market opened slightly higher today, dipped, and then made a higher rally high at SPX 1328. This is now a 36 point rally from friday’s 1292 low, the largest rally without a meaningful pullback in a month. Then right after nearing our swing point at SPX 1329 the market had its first meaningful pullback. The pullback continued for the rest of the day, accelerating to the downside in the last hour of trading. After hitting SPX 1310, a 50% retracement, the market bounced to close at 1317. While the pullback was a bit more than would have normally been expected, the OEW 1313 pivot held support.
Short term support remains at the 1313 and 1303 pivots, with resistance now at SPX 1328 and 1342/47. Short term momentum dropped past neutral after hitting extremely overbought for the first time in nearly a month. The short term OEW charts remain with a negative bias from SPX 1395, but the swing point for a potential new uptrend is now 1327. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market
Did we bottom or is this just the holiday reversal? I hate sitting on the sidelines..:(
Hammer on the daily ?
Whether we go up or down .. thats a somebody knows something move IMO
I feel like I’m in a hardware store. Hammers everywhere. LOL
nice hammer Lee..looks good, the rest of the day belongs to chasers like yesterday…there’ll be a pullback tomorrow I hope to re-enter
See yas !
Interested to see what Tony says in a few
Thanks !
wild day
Miners’ led the way?
Meanwhile, miner credit spreads blew out today
Like in metal miners?
hahaha
“Introducing the Hot New Social Network, PhoneBook”
http://www.zerohedge.com/news/borowitz-does-it-again-introducing-phonebook
if you’re looking for a humorous 2 min departure
DAX – closes over 2 % and the DJIA is .47 % lower with 38 minutes to go
ding pivot time …
I know we got in early today. It aint easy buying em when it looks like crap.
1292 + 34(fib) 1326; 34 *1.618 =55(fib) + 1292= 1347
The DOW did HH B wave top and LL B wave low IMO.
amen to that !
*1312 flatsky
amazing!…the crapola of 2 hrs ago is looking so good now…thanks HD.
H D
I’m getting out at 1419
Nice job
1313 side pocket…..
1306.50, corner pocket
Hi Tony
How much play do your EOW pivots have before they are “broken”?
Is there a general rule?
Thanks, Charlie
Don’t know if I phrased this correctly…
+/- 7 points
Tony – Thanks for the great blog site…Really enjoy the collection of traders (With great attitudes) Charlie
SPX 60min looks interesting… ABC flat correction?
now that they’re investigating the heck out of FB, it’s OK again…makes a lot of sense..let’s investigate $SPX pls.
HAHAHA….I LIKE THAT….
: ) the power of negative thinking ewp, it moves in waves also, I presume
Patrick
I’m getting bullish CL for absolutely no good reason
Gold: Interesting. While the metal is down, once again the miners are up. Hmmm…
+Div on DOW 60min at new low
yuuup
1296.16 SPX is key IMHO
my daily Leevot is at 1396.50
GL guys
Not bottom yet…wait a little longer….
thanks ewp4ever
See if they smack em here
hope it will end right around previous low …. maybe a little bit above…
Would it be rude to ask if anybody is going anywhere this Holiday weekend ?
I’ll be in Chicago for a christening …who schedules that on Memorial weekend ? My family
haha nice. I’ll be heading *from* Chicago to Ann Arbor to visit the wifey. no Christenings though.
Hey RC
Ahh Pure Michigan !
Ann Arbor ? You a Wolverine fan ??
oooooh, that’s a risky question. knowing you’re in the area I must chose my allegiance carefully… (is Lee a wolverine, buckeye, spartan, irish??) hah
I guess I am a small fan. but not much. i’m not from the area and only lived in A2 for a few years, but enough to get semi-indoctrinated in the blue and maize cult i suppose.
and i used to work in “the D” – so still waiting to see that “pure michigan” i heard jeff daniels tell me about on the radio every day.
Haaaa I’m a Spartan fan !
your basketball team destroyed my bracket this year, thankyouverymuch
heh
This Memorial will be spent remembering a friend of our family who died in combat just 2 weeks ago. All gave some, some gave all. Peace!
http://misheldesigns.blogspot.com/2012/05/all-gave-some-some-gave-all.html
Peace H D
So sorry for the loss
Thanks.
sorry about ur loss HD. Ur friend was much too young to die…
The EUR is inviting everyone from the USA to party there this summer.
Lets Go !
New lows CL
SPX not so much.
The not so smart $ is making money this week in CL…it never lasts long
1303 should be the tell SPX I think
CL retail has given up pretty much
Spring swoon 4.0
muchas gracias the EUR!..it’s for good traders only though, like Lee, HD, Tony… =)
idiots like me get to stay within city limits and work. You’ve got Ireland on ur mind again Lee, or branching out somwhere else for a change?
C B
Hey I missed ur post.. Nope I’ll be in town all weekend , We love Ireland so its always on our mind but we didnt go this year and no plans yet to go ;(
yeah, it’s a great place tp re-charge one’s batteries….I am playing nurse these days so not going anywhere these days
hey great news on the baptism, Lee!!…can you tell us who the lucky father is…would that be ur brother who you told us got married last year?
Hey C B
I understand.
Nope not my crazy brother… the State of Illinois will not let him reproduce
My nieces baby boy.
I thonk ur saying ur brother is crazy happy now, Lee …I get it
doh…I think…of course!! where is my eraser??
I am really geting excited about the prospect of a Dow drop below 12284, which should open up the opportunity for the market to stage a rally attempt somewhere at or near the 11737-11232 range. So far the price volume action during this correction hasn’t been constructive of an enduring low.
definitely not looking constructive…what’s the significance of 11737-11232?..sorry I am not familiar with the numbers on DOW so wondering where these numbers come from if you could pls. Optionstimer….thank…. Cool avatar, btw.
If I were to translate it into Tonyspeak, the 11232 would be the Major II low, and 11737 would be the low of intermediate II of Major 3. However, if 12284 does not hold support, then I would presume Tony would relabel that as minor 2 of intermediate 1 of major 3.
Tony, if I butchered that count I apologize. Great blog you are sharing here … Thank you!
Option, If you are referring to DOW 11737, you are correct!
thanks Option. Appreciate it.
Igor, thanks for warning us about the volatility spike th other day…how high is the vix going Igor? Thanks.
The VIX measures the implied volatility of the SPX options.
I use ATR to follow volatility, it’s in an uptrend. I don’t know how high it will go, I use it to determine my price targets and stops.
thanks Igor. Was thinking about what said about those wide trading ranges that we would have next…good stuff Igor.
Ok, back to our boring market…I feel like I was “early” getting long 1300ish…does the science say we go to the origin of the broken wedge no matter what (and despite all that cool +div we have on 5 min?)…what are the waves saying, anyone..?
Dow made a lower low at 12326.58,
SPX on the ventilator at 78% retrace…
NAS at 61.8% retrace ….
RUT below 200dma at 755….
What’s it gonna be? up or down ? i m still leaning towards a bullish resolution from here …
Tony, since you often call the Dow the bellweather, would it be fair to expect that if the Dow is leading, then spx & nas should follow and make lower lows?
AAPL holding ofcourse a big support for NAS here….so unless it breaks down, hard to see NAZ making a lower low?
Appreciate your thoughts Tony!
DOW appears to be leading
Thanks Tony
News Alert ! Super Models demand to be paid in $USD
esm 1296.50* is my pivot today
lol.. that’s funny Lee..mrs. brady must’ve retracted her statement ….gtk
I stole that one C B
Mrs Brady and Mr.Gisele
haha Lee
…hot in the bedroom, dangerous outside…I stole that one too
I think u can buy 1300 ES. TL should hold
I like CL @$90, don’t think GC has a prayer at $1530. GL
agree. looks to me like Gold needs to go to 1450 or so. I’m curious if a major washout in gold will lead to a commensurate selloff in equities, since many of the HFs who hold one hold the other and will see margin calls. seems to have been the case a few times in the past.
H D
Come to the dark side
heard $1300 in gold for the 1st time last nite..
thanks Hd
Thanks H D
My trading plan for today. I placed a conditional order. If NDX falls below 2498 I will be go 150% LONG (half qqq, half spy)… stops at 0.65% below the entry point (abt 80 DOW points)
Hope this is wave b and then we should see wave c up of this countertrend wave.
Wish me
This morning’s selloff in futures seems a little extended given the current count. Tony, at what downside level in SPX cash would you consider support for the current count? (i’m guessing as long as we stay above the 1292 low..)
Credit didn’t participate quite as much in the rally the last few days, though things were definitely not worse. It feels like there’s still a buyers strike, and while dealers attempt to quote spreads tighter with equities up, accounts don’t seem to really be biting yet. Bank/fin paper was about 5-10bp better yesterday at one point, but essentially gave it all back and closed flat by the time guys were going home. Would say we’re about +2-5bp wider this morning in 10yr bank paper. Industrials just a tad wider, call it +1-2bp. But not much trading really. Liquidity will get worse as we get closer to friday and the holiday weekend as well.
Spanish and Italian bonds have been creeping back wider, each about +5bp or so this morning. Spain is back over 6% yield (6.08%). Will be the third time now breaching that 6% are over the last year. Yields need to hold 6.32% as first support, then about 6.70% on the all time wides from last fall. If we go beyond that, things look bleak. If we can hold the line at 6.32% and come back in, we could put in a H&S on the chart – three tries to go wider and failed. We’ll see how it shakes out. Good luck everyone.
-rc
RC … 1303
Makes me think the mkt will pull its same shennanigan once again – sell off to 1302, clean folks out, then rally again. Just a thought
What could this mean going forward ?
http://www.cnbc.com/id/47531441
One idea: Better having german bonds than cash at the banks. Fear for a possible run on the EU banks ?
At the moment I see the move down from 1328 as something more than a mere corrective wave. The wave structure I see points to a move down past 1292, initially to 1280. I think we might see 1200 before this is over. 1328 is the key point to watch.
Steve
http://5wavemodel.blogspot.com/
great job! very helpful. thanks Steve.
Thx Steve,
TONY, do you think from 1292 to 1328, it is 3 wave or 5 wave up? Thanks.
IN MY OPINION, THE 3 YEARS RALLY FROM 666 (SPX) IS OVER…. NOW WE SHOULD BE WATCHING ANY REBOUND TO GET SOME CLUES ABT THIS NEW DOWNTREND.
Short term: not so sure this is the rebound we were expecting….but, I guess it will be positive if 1292 holds this week.
By the way, I am in cash.
GL
Anything is possible but sentiment says otherwise. Real LT tops occur in euphoric conditions where everybody wants to be IN the market with everything they have and then some. A top with bearish sentiment is almost an oxymoron. Sentiment has really been so bad chronically now on a macro scale for several years that even through the doubling of the markets over the last three of these bulls have been notably scarce. I know some that even at the highs pledged never to get in the market again. Even bulls are uncharacteristically skeptical of every move higher while silently fearing the worst. This bull is in its infancy and could run for years IMHO…
Thx Tommy, it looks we have an opossite idea abt the market long term. It is normal. Actually, it is good for the market. But an important short term rebound is for sure even if 1292 is broken to the downside.
GL
Hi Tony, what does it mean “the swing point for a potential new uptrend is now 1327″
thanks, Peter
Peter, If the SPX rallies past that point probabilities increase that an uptrend is underway.
Thanks, thought as much. However, is that on a close basis rather than intraday, as see SPX had a high today at 1328.49
Today it was 1329.
thanks Tony. Is it posbl that intraday we’re currently in 4th wave up , i.e. impulsing down from today’s high?
or, 3rd down Tony
CB, Best rally since 1415
thanks Tony,…so I guess it was not just 3 waves up?. and yes I saw the ramp EOD …past performance doesn’t guarantee future results, though i.e. can’t expect a gap-up tomorrow just b/c we had one yesterday..
… 5/15 min MACD looking ugly ..60 min ADX flipped to neg. …oh well, if I can’t beat them I’ll joing them 2morrow
CB, Looked like a simple wave up 1292-1328, then a pullback
thanks for ur help Tony! Appreciate it. Have a good evening!
too many bottom signals last friday as discussed here, NON Ewave… and EWAVE
Tonight, ARBA taken out by SAP for a premium
She aint dead yet folks…
Would like to see a close over 1322 and then over 1343
Thanks Tony !
OK. 1327 (SPX). ^
Bullish channel – lower retest trendline perfect at 1310
50% retrace perfect at 1310
150dma closed above yesterday and retest closed above today at 1315…
http://content.screencast.com/users/rockybalboaa/folders/Jing/media/027a42c8-867c-4943-9588-105dbd0b1e0b/2012-05-22_1252.png
http://content.screencast.com/users/rockybalboaa/folders/Jing/media/30cacf05-e5f7-41d9-990a-e8369d2b30be/2012-05-22_1303.png
ready for take off tomorrow and up forever..??
Go bullz!!
Hi Tony, do you think the up trend will last? I just have a bad feeling now… seems there is one more down in the near future….
Market is okay as long as the 1303 pivot holds
Thanks TONY, what is pivot? Why 1303? Thanks.
Well, its not perfect, but even if we are heading down past the most recent low, we may finally get a divergence in the indicators to signify the low. So far, I have bee waiting for this to happen.
The pullback today also counts nicely as a wave 2 of smaller degree.
POMO auction today as well.
Overall no reason to become overly anxious. Probably just a further shakeout.
Hi TACT: I have the same feeling about forming a positive divergence before really going up…:)
The only thing is how much lower it will pass 1292….
I see a lot of resistance in that area.
Frankly, I was hoping we go to 1340/1371 before heading below 1292. So far the retracements of this drop have been small.
Also the Dollar and Euro don’t look good for Equities. Euro Could be in some expanded flat wave 2 (hopefully).
Overall I feel we won’t go much beyond 1292, if we head down.
I feel it will be around 1290-1291… yeah, not far from 1292. Of course, it also depends how long it takes to get there. I bet it won’t be long, just this week.
The 200D MA is a logical target
How about a truncated one… that looks cute…
Dunno, If we go down, chances are we take out the 1292. 200D MA should provide good support. Everything else may be wishful thinking.
That said, I am wishing for an up day tomorrow
Honestly, I don’t have a good feeling for tomorrow…though I wish that too…
Tony, that was the last shakeout. Everybody now looking for the lower low. Precisely why we should gap up and go tomorrow.
Looked like a setup … remember europe was +1.9% today
Yep, my thoughts exactly.
Hopefully the same argument applies to Gold: everyone expects a new low, and that’s why there won’t be one!