SHORT TERM: consolidation continues, DOW -75
Overnight the Asian markets gained about 0.2%. European markets also gained about 0.2%. US index futures were relatively flat overnight and the market opened unchanged at SPX 1321. After a dip to SPX 1320 in the opening minutes the market rose to 1324, yesterday’s high, by 10:00. Around 10:00 Consumer sentiment was reported higher: 79.3 vs 77.8. After a pullback to SPX 1319 by 10:30 the market went into a 1319-1324 trading range until about 2:00. Then the market broke to the downside. By 3:30 the SPX hit 1314 and then bounced into a 1318 close.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.10%. Bonds gained 9 ticks, Crude added 15 cents, Gold rallied $13.00, 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 touched overbought early then dipped. Last night the FED reported a decline in the M1-multiplier, New home sale prices, and the Monetary base. Today the WLEI dipped below neutral to 49.7%, but Consumer sentiment rose to 44.3%.
The market opened flat then rose to SPX 1324 in the first half hour before heading lower for the rest of the day. This small rise improved the chances that an uptrend is underway, as the market cleared the SPX 1321 swing point before pulling back. Should an uptrend be underway we would expect the market to hold the 1313 pivot range during this pullback. Short term support remains at the 1313 and 1303 pivots, with resistance at SPX 1324/28 and 1342/47. Further details in the weekend report. US markets are closed monday for Memorial Day. Enjoy your weekend!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market
While the market may yet break out to the upside, the action today from 1324 looked short term bearish to me. I think we see a continuation down from 1324 on Tuesday.
Steve
http://5wavemodel.blogspot.com/
This is how I read my indicators on spx fut:
they suggest we hold 1313 too, then will bounce off at 1347 late next week and head for a lower low than we have had this month prior 18 June (chosen for its meaning in Europe/Greek Election). We then continue the bullish trend.
It is always great to see confirmation with another study using different methodology (like Tony’s OEW:)) so i possibly wont be third time lucky due to current preferred count.
In any case I am sharing too.
my previous analysis posts for ref:
http://caldaro.wordpress.com/2012/05/12/weekend-update-344/#comment-82375
http://caldaro.wordpress.com/2012/04/26/thursday-update-328/#comment-81343
sorry typo 1340 not 1347
thanks for your input Sun
Thanks Tony! Looking forward to the Weekend Update. BTW, i wanna WROC n’ Roll (all night and…) real soon…
http://www.youtube.com/watch?v=Env5iMrBjws
Very optimistic report in light of the EUR/USD fiasko.
I would expect a lower low first before we start the next up phase, unless something drastically positive happens soon.
It stands to reason that the FED is happy (responsible!?) for the rise in the Dollar to get ready for QE3, but its not a sound investment strategy to await more easing (esp. since you mentioned the multiplier is down anyways, its like pushing on a string).
TAC, Think the FED is watching PCE prices quite closely.We get the next update on friday. Should we get a weak payrolls report, also friday, and a PCE closer to 3%.Doubt the FED would hesitate one moment to pull the trigger on QE 3.If not, still feel they will do something further about housing in an attempt to beef up payrolls.Just following the waves, and observing the money changers.
Tony,that would be at end ofJune when twist ends?
yes
Thanks Tony, it is good to see 1292 held this week. Not so sure a rebound is coming. In my opinion the market could go either way early next week.
So My alt 1 (suggesting a rebound) and alt 3 (suggesting another leg down) are both possible now. I’ve removed my alt 2.
alt 3: if we see another leg down I think it could be wave b down. And also a perfect short term bear trap.
Have a wonderful weekend.
et tu Mario