SHORT TERM: market gaps up and keeps going, DOW +278
Overnight the EU apparently concluded their meeting with a plan to aide their distressed soverign debt issues without forcing austerity programs on those that meet their fiscal budgets. The EURO rallied 2% on the news and all other markets responded. Asian markets were +2.1%. European markets opened higher and closed +3.6%. US index futures were much higher overnight as well. At 8:30 Personal income was reported: +0.2% vs +0.2%, while Personal spending declined: 0.0% vs +0.3%. PCE prices were reported +0.1% vs +0.1%. The market gapped up at the open to SPX 1342 and continued to rally. The SPX had closed at 1329 yesterday. Around 10:00 the Chicago PMI was reported higher: 52.9 vs 52.7, and Consumer sentiment lower: 73.2 vs 74.1. The market continued to rally until 10:30 when it hit SPX 1356. Then after a small pullback to SPX 1353 by 11:00 the rally resumed. Heading into the close the SPX hit 1362 and closed there.
For the day the SPX/DOW were +2.35%, and the NDX/NAZ were +3.05%. Bonds lost 16 ticks, Crude soared $7.15, Gold rallied $41, and the USD dropped. 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. Last night the FED reported a decrease in the Monetary base, and today the WLEI was reported lower as well.
The market gapped up at the open today and never looked back. Quite impressive, and kudos to those that were expecting it. The rally, which may have been started by the strength in the EURO, flowed into most asset classes one would expect to see move in a “risk on” scenario. There may be some more important European developments, in the works, than what was announced last night.
The market started the day by gapping up to the SPX 1342/47 resistance zone, and then quickly went right through it. By 10:30 the SPX had already entered the OEW 1363 pivot range: 1356-1370. After that the market struggled a bit to make much more upside progress until near the close. In light of these recent market developments, and the many conflicting signals from various asset classes, we plan to take a look at the big picture for most asset classes in this weekend’s report. And, of course, update the status of the US bull market. Best to your weekend!
MEDIUM TERM: neutral to positive
LONG TERM: bull market
What % of the rally was part of the Wall St. show to finish up for the second Q? I guess it doesn’t matter as long as you trade it. Will it hold?
It all depends on Europe
I think the market completed wave 3 of 3 from 1267 today at 1361.63. The most likely scenario is a pullback to 1345, and then a resumption of the uptrend. My target for wave 3 from 1267 has been 1393, but it now appears, as I mentioned as a possibility last weekend, that this wave may carry to 1475-1480.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/06/fridays-market-062912.html
The bearish count was adjusted……….http://scharts.co/LCY6AG
The bullish count is abt the same………http://scharts.co/MXruw7
Thanks Tony,
It is hard to make any projection at this point.
I am still 150% short. So it would be very nice if we get a selloff on monday. =)
GL
Expected a rally in Gold after I noted the positive divergence on Gold’s daily chart last night; but the strength of it took me by surprise!
As I wrote yesterday I think Gold just finished a 1-2 off the mid-May low.
That gives a 15 day duration for Minor 1, and 16 days for Minor 2: so I like the time symmetry.
Same as Patrick’s previous count, except with Major 4 ending at the mid-May low, rather than the late-May low. Weekly RSI appears to show five waves up off that mid-May low into the early June high: so I would hope to see a rally extending to the end of July to provide time symmetry with the lateFeb – mid-May decline.
Quite like Patrick’s idea of Primary II in 2008, with Primary IV from Aug 2011 – May 2012.
Is it possible the GTX only completed Major a of Primary B? That would allow Gold to finish it’s bull market during Major c.
thanks Alex
You’re welcome Tony.
Is there anything that excludes that count on the GTX?
Actually, no Alex.That would be a possibility.
All good rallies are on the back of some hapless shorts. And with Europe-this-and_Europe-that pumped from every mouthpiece everywhere, getting a day like today would be easy, just hot the futures with a few billion leveraged 30X and voila — shorts will carry the rest
Now with commodities having been due for a 3-yr low and Semi’s being due for a 2-yr low, the question is: What will happen when the last of squeezable shorts are creamed and discarded
But, the beauty of a day like today is that it gives any long the chance to reduce or hedge or go on trailing stops so that even if the long-cycle low expected is not in place, one does not dose much if stopped
true Behrouz!
Will Italy outlast spain?
likely
Sorry Tony
Thought the spx would make it above 1363. I could see the period of flat trading was ending and a move to the upside was coming.
Good news for the bulls.
If we go a little higher it will be statistically significant on the now rising 200 hour ma and the 4 hour long macd(60,130,45) turned bullish today for the first time in months. Hinting that the weekly macd will turn bullish soon.
SPX 5 minute bull market is slowly losing its long momo. Probably going to be wave 2 correction on Monday.
kudos Rob … good call!
Now that was a short covering rally – 1360 ES is line in the sand – break above then bull back on – if 1360 holds then 1225 and 1140 still open. If 1360 breaks then Ill buy pullback around 1330 area; If you were long at lows congrats – that took some steel cajones
Tony, I think every cycle imaginable bottomed today…lol
Thanks for your work greg
get that feeling too
Thanks Tony !
The key is to stay solvent and sane .. But 1 out 2 ain’t bad
I don’t think I’m a crude master at all… I’m just the only one touched enough to trade it and talk about it.
My only advise to folks here is it’s ok to be wrong
Knowing when ur wrong is a heck of a lot better than thinking ur right all the time….at least with trading
My only advise to folks here is it’s ok to be wrong Knowing when ur wrong is a heck of a lot better than thinking ur right all the time….at least with trading.And in life too!
Wise words, Lee. Yesterday at 3PM EDT I was sitting smugly satisfied with my shorts. By 3:35 I was doing some very inspired buying to cover said shorts. Once flat, I was so stunned that though I knew that the thing to do was to get long, I stayed flat. And I stayed flat right through today. Mr. Market has handed me my first losing month in a month of Sundays – I am finishing June 2012 down 2.05%. I don’t feel too good about that, but then I remind myself that had I stayed in my fully levered shorts until the open today, that gap up would have left me down a whopping 8.02%. In other words, knowing I was wrong made closing my shorts at a small loss my best trades of the month.
No a bad day, eh?
And that after Italy beat the Germans and sent them home from Warsaw