SHORT TERM: decline resumes, DOW -138
Overnight the Asian markets lost 0.6%. European markets opened lower and lost 1.8%. US index futures were lower overnight as well. The market gapped down at the open to SPX 1325 and headed lower. The SPX had closed at 1335 on friday. At 10:00 New home sales were reported higher: 369K vs 343K. The decline continued, will small 3-4 point rallies along the way, throughout the morning. Then around noon the SPX hit 1309 and tried to rally. With a short term positive divergence in place the market managed to make it back to SPX 1317 by 3:30 before fading into a 1314 close.
For the day the SPX/DOW were -1.35%, and the NDX/NAZ were -2.00%. Bonds gained 17 ticks, Crude lost 80 cents, Gold rallied $10, 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 is displaying a positive divergence. Tomorrow, Case-Shiller at 9:00 then Consumer confidence at 10:00.
The market gapped down at the open for the first time since last monday. Then the market dropped through initial support at SPX 1324/27, and continued lower until hitting about midway between the 1313 and 1303 pivots. This set up a positive divergence on the hourly charts and the market tried to rally. Short term, we can count a 1-2-3, or abc, into today’s extremely oversold lows. A bounce back into the mid-1320′s would not be too much of a surprise.
Initial short term resistance remains at the SPX 1324/27 area and then 1334/38. Support remains at the 1313 and 1303 pivots. Short term momentum displays a positive divergence. And the short term OEW remain with a negative bias and the swing point is now around SPX 1332. Best to your trading!
MEDIUM TERM: downtrend likely resuming
LONG TERM: bull market
keep em above 1313.50 and we can rally a bit more before the end of the world comes.
Tony – do you think 1313 held yet again and we rally to your 1499 target from here or is there too much technical damage and we will still be looking down?
I really appreciate your input and thank you for your replies – hard to get honest answers from some but I respect your replies.
pbnj
PB, This looks like an oversold rally.Think we head lower first.
Thank you
I really appreciate you taking the time to answer my questions – means a lot.
Cheers
any time PB any time
Sorry for my chatter box posts
Have a great day/week guys !
see ya thursday
SPX still looks cupnhandle to me or B at today’s low. 1323. Of course I got stopped, bottom ticked actually, so I chased. GL
H D
I hate those robots !
Thx !
Crazy huh. watch that 10 point algo. She’s a beauty
they never learn
We called it the Cartwright range( 10 handle rule) back in the day
Ponderosa?
Nice ! but no … guys name was William Cartwright and he was the pioneer of the 10 handle rule in the S&P 500 pit at least on our side of the pit. Nick names were Billy Smack and Bildo.
Did he look like Bilbo Baggins?With or without the ring?
Ha He was 6’6 275 lbs then and left the business to manage and train horses with Illinois horse breeder Harvey Vanier and YES he was a big fan of Lord of the Rings except we called him Bildo instead of Bilbo for obvious un mature reasons
Big transition from the pit to the stall.http://www.cartwrightthoroughbreds.com/manager.htmthere you go …
when you get to the part in the story where they named a horse “Love Handles” you know the guy must’ve really liked those 10pt handles..lol ..great story, Lee!
They never learn ….summer rules
nice reaction @ TL Corn from 675.75 4 LH’s
ZW hit the .786 and is looking doji daily. Last doji from rally traded down 100. 100 from here is back to pivot 655.
Thanks H D
Are u predicting Pain Rain in the Plains ?
150 point rally (20%) might retrace
algo’s got em the rest of the day IMHO SPX
reverse drip
Hey H D
The funds are scrambling in grains it should be interesting !
Its gonna be a long day for these guys
http://www.bloomberg.com/news/2012-06-25/central-banks-commit-to-ease-as-threat-of-lost-decades-rises-1-.html
Corn dogs reversed into the State Fair season… Its all a fix !!!
U would think 1313 SPX is a pivot or something ?
you would wouldn’t you 450
Vaporized!
at what temp does pop corn pop ?
Hmm Range seems more appropriate.Sell calls and puts while people like me and the uber Bulls look for extremes,Lol.
I agree its an election year but the market needs its fix to rally.Bulls,convince me you have a fix and I would look for 1500+. Markets cant be at the same point for 2 months! Traders have to trade and hedge funds need to make money
Thus the ramge…
make that ‘range’!
Tony,
so, you think commodities have entered a 21-yr bear cycle?
Without a QE program it looks like it.
21-years of monetary contraction? from here on?
Doubt that.The world would implode.Liquidity supercycle still in force.But it looks like this part of it is over.
Or 21 years of economic expansion?
or both monetary contraction and economic expansion?
Too early for the expansion phase.
GM all, SPX got the 10 point reaction from the low yesterday. 1313 pivot looks cupnhandle now IMO. 1323 HWB
Great win by the ZONA Wildcats last night! Proud to be Alumni.
kudos!
Love the avatar !
Pivot time
Bulls be careful,the bear in me has walked out of the cave. I am looking for a more than 100 point decline in ES/SPX from here.See SPX at below 1200.
Seems like everyone either expecting a big down or big up from here. Once again probably go no where – sideways for the foreseeable future – or maybe down then up or up then down for a net nothing within a range until late Summer/Fall. Time will tell but election years do argue for the bullish case.
thanks Tommy
CADUSD Fibo 61.8…
http://astrofibo.blogspot.ca/2012/06/cadusd-fibo-618.html
Hi Tony,
Thank you for your latest commodity update, a very sobering outcome. I’m looking at the charts of all 5 sectors, including the GSCI, but am not able to understand why you would conclude that 3 out of the 5 sectors have confirmed secular bear market (21yrs?). If it is not proprietary, will you be able to shed light on how to see from the technical side of things?
All I can say is that they have reconfirmed long term downtrends.
Interesting article on Gold from March:
http://news.goldseek.com/SpeculativeInvestor/1331820420.php
I think these interest rate conditions are still in place, so not convinced the bull market has ended.
Also the last two bull markets in Gold have exactly straddled severe corrections in the stock market (e.g. the last bull market began 6 years before the 1973-4 correction, and ended 6 years afterwards). If this one follows the same pattern, that would project an endpoint in 2015.
What I see as more probable scenario is a washout to 1075 range by October which will lead to a high of the year above 1422 to be tagged before end of year.
Tony,interesting analysis on expected target of 1530′s by end of this year for SPX based on Operation Twist.
I would concur that the previous twist actual rise 22% cant be attributed to Twist as it was the LTRO which was the main driver in my opinion.Therefore I would be very surprised to see 1530′s before end of this year. For that to happen market needs to bottom around 1380′s in October and one can expect a 150 point rally to reach target. But for market to be at 1380′s in October means we are currently in the bottom and the washout necessary for any additional QE3 or LTRO wont happen and so we wont have anything to support the 1530′s move.
Do you understand my logic?
Yes I also noticed Tony didnt mention the LTRO program which I think may have been the big driver for the rally in equity markets.
Im thinking the markets need ECB &/or FED intervention to rally and until that occurs the markets will struggle with Spain paying 7+% and Italy paying 6+%
Yes, but I’m not expecting SPX 1500+ by year’s end … next year.The ECB may need to introduce some liquidity program soon to act as a catalyst like LTRO2.
Watching this count
http://scharts.co/LCY6AG
Well I was completely wrong about today. I will remain bullish until the SPX breaks below 1306, We should see a rebound here back to the 1323-1326 area.It looks like the market may have under gone a complex correction from 1328. If so, my upside targets of 1393, and then 1326 remain intact. A break below 1306 would mean a 5 wave sequence from 1267 has completed, with a re-test of 1267 likely.
Steve
http://5wavemodel.blogspot.com/2012/06/mondays-market-062512.html
Thanks Steve
I don’t see how you can say you were dead wrong.
Last weekend you thought the market made it’s low ( you were wrong ) but you said there was room to make a low at around 1313 ( which we did – you were right ) and you also said if we go below 1311 – you would be dead wrong.
We went below 1311 – but we didn’t close below 1311.
I still think you are as right as can right can be in this market.
Instead of moving to 1393 – the new target is 1375 to 1380 if we went down to 1313.
So ythis scenerio is still in play.
Of course – there is still a chance for you to be dead wrong – that”s if we break 1311 and then go to make new lows.
But – according to what you thought after fridays close – you’re not ” dead wrong ” yet.
Keep the faith.
Thanks Karl.
Steve
Mkt is going down to ES 1220-1225 area Possible for a flash down to 1140. Mkt is in serious trouble and very dangerous right now. We need the SPX 1500 bulls to keep buying to so we can hit the tgts below
GL
Isn’t it the lack of buyers required for the markets to tank?
Or an overload of sellers, hedgers
Tony, I’m reading falling euro and falling Asian currencies are beginning to hit US profits and 2nd quarter SPX profits could see slightly negative growth. And as time passes it looks Europe it getting itself into a much bigger pickle sooner rather then later. So it appears only FED or ECB intervention can save the markets from much bigger falls this year …. Any thoughts?
Yes, it has certainly been a tough bull market since day 1.
earnings will come down. i think we could see spx earnings in the high $90s for 2012, which would be nearly a $8-10 drop from current est. rising USD will hurt a lot of multinationals for 2Q. they’re already guiding that way
RC, One of the bearish banksters are suggesting under $100 in earnings for SPX.
not sure what the banksters are saying, other than i know they’re usually wrong more than they’re right. from a bottoms-up perspective, high- $90s is the area my team and myself have come up with when we look at all of the companies in our coverage universe.
THANKS TONY,
WE DIDN’T HAVE THE REBOUND THAT I WAS EXPECTING, SO I DID SELL SHORT THE MARKET AT THE CLOSE. (BOUGHT DXD THIS TIME).
=)
gl
http://scharts.co/LCY6AG
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Well, we hit my expected target within one day (chart I drew on the weekend shows it). Question is what will happen now. If we bounce, we should get a complex correction (my favored scenario), if we drop from here, I don’t see much hope for the bulls anymore.
Long Term things are looking bad, so lets hope for a bounce before we put in the 5th wave down.
Thank you Tony.
Hey guys, trading psychology webinar 2morrow if anyone is interested..broker-sponsored by foc http://www.mirusfutures.com/emails/shull_062612.htm
Lee, lol…that’s a funny avatar you’ve got there….but boy does that guy look immature or what..
sorry, typo, should read: “but foc”
imho, trading range between 1310 and 1360 – until 1306 is broken on a closing basis.
Tony, I see you’ve just changed JPY to: downtrending on ur charts ..risk on (?) thanks!
Looks like it’s ready to resume its bear market, after a bounce.
thanks Tony. Just gap-flling, hopefully, and voila..let’s see what kind of magic we get out of that..
Thanks Tony !