SHORT TERM: market gaps up and rallies, DOW +96
Overnight the Asian markets were relatively flat. Europe opened higher and gained 1.7%. US index futures were higher overnight. Last night the FED released counsel Alvarez’s testimony: http://www.federalreserve.gov/newsevents/testimony/alvarez20120619a.htm. This morning, at 8:30, Housing starts were reported lower: 708K vs 717K, but Building permits were higher: 780K vs 715K. The market gapped up at the open to SPX 1350 and continued to rally. The SPX had closed at 1345 yesterday. The rally continued, with small 2 to 3 point pullbacks, to precisely the OEW 1363 pivot around 1:30. Then after hitting extremely overbought the market started to pullback. At 2:30 the SPX hit 1357, rallied to 1362 by 3:30, then pulled back to close at 1358.
For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +1.15%. Bonds lost 8 ticks, Crude gained 80 cents, Gold slipped $7.00, and the USD was lower. 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 during today’s rally. Tomorrow, the FOMC statement at 12:30.
The market gapped up at the open today, balancing yesterday’s gap down opening. The market opened at a new rally high, SPX 1350, and continued on to 1363 before experiencing its first noticeable pullback. This market has now rallied nearly 100 SPX points in just two weeks. We continue to count this first rally, in the potential uptrend, as Intermediate wave i. Minor wave 1, of Int. i, ended at SPX 1336, and Minor 2 ended at SPX 1307. Minor wave 3 has been underway since then.
We have been expecting a rally, from the recent SPX 1267 low, to the OEW 1363 or 1372 pivot range. That was accomplished today. The rally, however, looks like three waves so far and this is a bit of a concern. We were hoping to see five waves up into tomorrow’s FOMC statement. Short term support is now at SPX 1342/47 and 1335/36, with resistance at the 1363 and 1372 pivots. Short term momentum is declining after hitting extremely overbought. The short term OEW charts remain positive, from under SPX 1300, with the swing point now at SPX 1333. Be careful tomorrow, markets may become quite volatile!
MEDIUM TERM: uptrend likely underway
LONG TERM: bull market
Gold still sulking ..rest all pretty flat.. wonder what will Asia do tomorrow…gut ( and nothing else for now ) says buying crude here and now may turn out to be the best trade of the year…no personal position yet..
Twist or not, I go by the most probable elliott wave pattern that I can reasonably discern, right or wrong.
I see 5 down, 3 up (maybe not yet done but close) and likely 5 more down
if we go much past 1375-77 I’ll be pretty surprised, but it wont hurt me. I dont trade the indices, or rarely… maybe an ETF here and there yes… but mostly I look for stock set ups and play accordingly based on individual patterns, fundies, and more…
NEON, VRNG, CRAY some big winners for me last 2 weeks. I like DDMG now if it holds 6.40, but the market… well my projection is for new summer lows
but we will see
For the record, I did recommend a BGZ ETF entry at 1360 Sp 500 yesterday for 1/2 position, and then another 1/2 added if SP 500 gets to 1375-77, and then we close for a loss if we close over 1389…. so that is where I am swing trade wise and market wise.
So we went long about 21.50 on BGZ for 1/2, and will be looking to add if the market pops a bit higher yet
Otherwise only Mr Market can tell us next what will occur, right Tony?
With the SP500 currently at 1357; down a mere -4.5% from its recent highs – it should come as no surprise that the Fed did not embark on additional stimulative actions at its meeting today.
http://nandanshah.wordpress.com/2012/06/20/june-20-2012/
But they did
hah well Tony, i guess only balance sheet expansion is considered stimulus these days. everything else is just a waste of time.
RC, We got between $200 and $400 bln, but not QE 3.This will likely impact many markets short, medium and long term.
agree with you there my man. to be honest i’m a little surprised they didn’t pull the trigger on more, especially given the largely dovish makeup of voting members this year. i can only imagine that they might be sooo worried about europe + fiscal cliff at the end of the year that they really feel the need to save some dry powder.
we’ll see how this all shakes out. i’m flat right now. i [uncharacteristically] timed things right for once and loaded up longs at the bottom. i so rarely make such great calls that i couldn’t resist taking the gain and am now totally cashed out. haha what a wuss! oh well. now just waiting to see what this and the next wave show us before i reposition. thx. good luck!
knew this was going to be a wild day no matter what they did kudos on the trade!
The most important thing today was that the fed gave the markets a safety net of sorts. The markets might lose 15-20%, but if it gets there, they’ll step in with the big guns. This could be setting up the final push to the highs of this bull market. Bernanke was very clear that QE is on the table if Europe falters or the numbers in the US get worse.
I think we’re going to see a little bit of downward movement before the next push up. Didn’t the markets react negatively to the first Twist announcement? It wasn’t until the LTRO by the ECB until the markets really started picking up steam?
True, that’s what happened the last time
Indian Gold and silver closing near session highs…
Tony, looks like we might put in that minor 4 and 5 intraday today…
Tony – if we do not make a higher high today could C of an A-B-C (3 wave structure off the 1267 low) still be completed and setting up for a 1-2-3-4-5 down? or is that too messy?
Thank you
Not looking for 5 down
Okay – thank you
Intraday zigzag complete and rally
http://www.wavegenius.com/2012/06/20/elliott-wave-noon-update-6-20-12-zigzag-intraday-complete-and-a-rally-youtube/
Not a bad outcome at all…now the close will get interesting
No QE3. David’s scenario is in play IMO.
Nope…a slight flutter and then off to the races now…the results are better than consensus…
what do you mean by results? the market reaction, or the actual Fed announcement?
We shall see, as Sherlock Holmes said to Professor Moriarty at the Reichenbach Falls.
you mean right before (it seemed) they both fell in?
Rc,
Last time I talked to Sherlock his did not seem to have any bruises
The actual fed announcement…twist being extended through to the end of the year as compared to a 3 month extension…while there was a lot of noise about QE3 i think there was very little hope given this is a election year and the fact that the republicans have openly branded any fed stimulus as partisan….so given the constraints FED has really outperformed….having said that… fingers crossed for the close…. if the markets really hits 1372 today or tomorrow before the deep pullback then I suppose we would be home and free and have a clear roadmap a.k.a Tony to 1499
Earlier in the year I had made a bit on shorting copper …. but was stunned by the strength later on despite the bad news out of developed markets and China ..then I realised ….It is hot as hell in india…air conditioners are sold out…sad to note however that the old banned compressor gas is used …..still destroys the ozone layer…On another note buy crude…the low for the year is made today…disclosure : Long copper , mulling a long crude here…
Silver says “Yes to QE3″ , Gold says ” Not so fast”.. who do u listen to ?
Silver in most part is an industrial metal, so I think it is a response on an activity in the Industrials.
Possibly.. that’s quite logical..
European markets either are pretty confident of QE3 ..or unfazed by the possibility that QE3 may not come..hard to believe that they are at the high point of the day
My Plan.
Buy GLD/SLV if QE is a go.
Buy GLL or ZSL if not.
If they announce further twisting I will wait and see the reaction from the markets (might be negative at first. Like a child getting a crappy present for Christmas, stomping his feet…yelling and screaming.) Will probably go long with GLD/SLV later.
Like a child getting a crappy present for Christmas … hahaha
Out of SMH here before the FOMC announcement
Igor says:
June 18, 2012 at 9:33 am
Trying small long in SMH here.
Igor,Seems everyone is bailing out ahead of the FED
What interesting to me is that all sectors in my breadth model are still in sell mode, but yesterday the Industrials switched into buy mode leading by the Commercial Vehicles & Trucks and Building Materials & Fixtures industries. Quite unusual to see that from the Industrials before the Discretionary and Technology sectors. I suppose if the Industrials will remain in buy mode we can see an activity in the Materials sector also. Actually there is some activity in the Chemicals.
Thanks, have XLU and XLP in confirmed uptrends. AAPL and FDX are uptrending too now.
Tony, assuming we still do get a Minor 4 and 5 waves, what are your ballpark targets for those? 1342/47 minor 4 then 1372 or so minor 5?
Sounds about right
cool. thank you sir, as always
Amazingly, this scenario seems to play out together with Twist extension. Although I would still expect some more CB action, maybe over the weekend. The situation in Spain continues to deteriorate so that the bank-bailout there is not enough to prevent an outright sovereign debt crisis. Then there looms Italy. So I expect something more. Until then it stays dicey.
been chatting with some strategists lately about today’s Fed meeting. my view is that the consensus expection right now in the bond market is about a $400bn twist extension, sterilized, with a purchase of 10yr equiv bonds and sales of same amount short term. with an additional chance that part of that $400bn – maybe up to 3/4 – is in the form of mortgage purchases. i don’t get the sense that there is much expectation for non-sterilized (balance sheet increasing) actions. so if we do get that my guess is it comes out as a positive surprise. so that’s the base case gameplan i’m working with. cheers
Thanks rc
Cheers
thanks RC appears to be the consensus
Tony is gold leading equities again?
Think Gold is suggesting no QE 3
That might fit in with the three waves up to now – then five down to come?
Or reading too much into gold?
the real test for Gold will be thursday/friday this week
Thumbs up, RC.
Turtle Trend Analysis: NIFTY-I last traded price: 5102.5. Current Hourly Trend: Neutral, Trend Up Above: 5188, Trend Down Below: 5031.5. You may follow us on facebook at http://www.facebook.com/stockmaniacs . Visit http://stockmaniacs.net/blog/what-is-turtle-trading-system-download-free-amibroker-formula/
The good thing about all that choppy trading in the IHS is that nobody recognizes it as a possible IHS. ABC rallies wouldn’t open the 20 day BB’s this much. The battle of the 50 dma is underway. 50 dea is up.
I have heard/read quite a bit of talk about this inverse H&S.
agree with R Parker. i was thinking that was actually one of the more clear and regularly mentioned IHS that i can recall in recent history
http://www.channelsandpatterns.com/2012/06/very-bullish-pattern-setup.html This is from Jack Springheel blog, I think some of you here may know of him. Excellent work and also answers questions.
It looks like the market completed wave 3 from 1267 today at 1363. My model still requires one more wave up to complete a 5 wave sequence. If this afternoon’s 1357 low holds, and the market moves back above 1363, I now project wave 5 to terminate between 1410, and 1414. If 1357 does not hold, this could be a pretty significant corrective wave, with the nearest support clustered near 1324. If that occurs, wave 5 may only carry between 1372, and 1381.
Steve
http://5wavemodel.blogspot.com/
Thanks again Steve
You called this last move just about perfect.
I hope the 1357 range holds and we move above 1400.
It seems to me with the Fed and the supreme court throwing out Obamacare – we could be their by early next week.
Time will tell.
Thanks Karl. Even though we broke 1357 today, I see some positive developments. 1400′s may still be in the cards. GL with your SDS options,
Steve
how high do you think we go for the 5th wave any major pullback
Good evening sirs,
I still see the same. My alt # 3 unfolding.
However, this countertrend rally it is starting to look more like a wave B than a wave 2 to me. So at this point, I see:
1. wave 3 from 12,399 (dow) could be done and wave 4 may be unfolding. Wave 5 after that.
2. 13,000 (dow) should act as resistance as I mentioned yesterday.
3. wave C down should be next. It is possible wave C=1.62 of A.
4. A choppy wave C and quite difficult for trading.
http://scharts.co/OYbQnJ
GL
NAS Fibo 38.2…
http://astrofibo.blogspot.ca/2012/06/nas-fibo-382.html
Wavegenius Positions and Expectations for 6.20.12
http://www.wavegenius.com/2012/06/19/current-wavegenius-positions-and-expectations-61912-video/
SP500 Time Ratio 138.2…
http://astrofibo.blogspot.ca/2012/06/sp500-time-ratio-1382.html
I remain a bit sceptical.
On the positive side, today’s action erased the negative divergence in most indicators.
On the negative, vix is up, which might be nothing more than option buying ahead of the FED. Most indicators are overbought (not unusual if we are in wave 3).
My REIT were doing well (speculation on Mortgage backed security easing?). Either way, sold a good junk of those things and initiated some shorts today at 1363. I will watch the 1340 area with great interest. If the retracement is shallow and 1340 holds, I believe we will go for that 5th wave Tony is expecting.
CADUSD Time Ratio 161.8…
http://astrofibo.blogspot.ca/2012/06/cadusd-time-ratio-1618.html
Yah, I’d be concerned lads…. ABC to 1344 or 1361/2 was my June 5th forecast. We took an intial 1/2 BGZ position near 1360 today for starters, will add at 1375-77 where I think we top out if we get there.
ABC is pretty clear, 5 waves 1422-1267 also clear… so Im sticking with my gut on another 5 waves down at some point here
cheers all
if this is an A-B-C, so far we have C=76.4% of A (approximately), with the full ABC rally nearly exactly a 61.8% retrace of the 1422-1267 decline
Tony,
Could you elaborate this a little bit more on your concern? “….however, looks like three waves so far and this is a bit of a concern.”. Thank you!
From what I understand Tony suspects A-B-C corrective followed by 5 waves down. In this case 1230-1240 could be the end of that move.
i believe that is correct (assumption of Tony’s concern)
It all depends on tomorrow and thursday
If we get a significant pullback from around these levels it could end up a full retracment and more.Never know what the FED will say until they say it.Or how the market will react.Would have rather seen 5 up instead of 3.
with that, Tony, I am in full agreement.
cheers. and thanks for the great weekend update btw
cheers