SHORT TERM: gap down opening hits new lows, DOW -31
Overnight the Asian markets were lower losing 1.6%. Europe opened lower and declined 0.7%. US index futures were lower overnight, and at 8:30 weekly Jobless claims improved: 350K vs 374K. Also at 8:30 Export prices were reported lower -1.4% vs -0.5%, as were Import prices: -0.3% vs -0.1%. The market gapped down at the open to SPX 1335 and continued to decline. The SPX had closed at 1341 yesterday. Around 11:00 the SPX found support in the 1324/27 zone, hitting 1325, and began to rally. The rally carried the SPX to 1339 by 1:30. Then after a 5 point pullback to SPX 1334 by 2:00, the market made a slightly higher high at 1340 before pulling back to end the day at 1335.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.90%. Bonds gained 2 ticks, Crude was flat, Gold slipped $5, 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 displayed another positive divergence at today’s low. Tomorrow, PPI at 8:30 then Consumer sentiment at 10:00.
The market gapped down at the open today. Broke through support at SPX 1334/38 during the open, and continued down to support at 1324/27. After that the market had a fairly good rally to just above the SPX 1334/38 zone. A volatile day! From the current SPX 1375 uptrend high we can count five waves down into this morning’s low: 1363-1374-1333-1344-1325. Five wave declines, of this degree, are often followed by another five wave decline shortly thereafter. This is the typical ABC, zigzag, correction.
This suggests the uptrend may have ended in a large ABC, (see DOW charts), at the recent high. Should this be the situation, a 50 point decline (1375-1325) could be followed by a 20 point rally, then possibly an 80 point decline. This would complete a zigzag, ending a complex ABC correction from May, around the previous SPX 1267 low. A break below DOW 12,450 would suggest this scenario is underway.
Short term support is at the SPX 1334/38 and 1324/27 zones, with resistance at the 1342/47 zone and the 1363 pivot. Short term momentum rose above neutral today after the positive divergence low. The short term OEW charts remain negative from around SPX 1350, with the swing point now at 1345. Best to your trading!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market
USA!
haa..yup http://www.youtube.com/watch?v=LMhq1L0cJf0&feature=related
and Mondays are sometimes even more….’so’
nice job HD this week..thanks for us help as always…enjoy ur weekend all
sorry ..typo..meant to say : thanks for ur help HD..
Tony, can you help me find ur most recent update on residential real estate. Also, what would be a good way to get some exposure to the North East rental market via an ETF, if psbl.? Thanks!
Here you go CB http://caldaro.wordpress.com/2012/03/20/quick-update-on-housing/
thanks very much Tony. Have a grt weekend!
u 2 CB
Tony and all — is this a possibility for the ii down move being complete?
http://www.chartupload.com/images/44877690317643054977.png
Trying to stay within your 1 2 i ii count…
Fed comes right out and says it – “the market is nothign without us”
http://www.cnbc.com/id/48165921
http://www.youtube.com/watch?v=Qoi25XRDeeo
hah nice. always good to get a little Barry on a Friday. cheers!
bi-polar market by ben bernanke
There is a major cycle 17-19th window coming up next week, and if we rally into that, in a wave 2…. it could set up a nasty 3 down…
guess we will see
We are in the opposite direction now….I am expecting a new low to be hit intraday today or monday
I’m curious about what you’re seeing in this market that makes you expect a fresh low — particularly with the Dow up over 150 points.
this market looks way too strong for anything resembling a low today. stocks, gold, USD, credit, rates, EUR… all seem to be the on the page.
David,
If we were starting wave C and this is a wave 2, doesn’t wave 1 (1375-1327) seem awfully short? I’m not ruling your scenario out. Frankly I don’t know if I have ever been this confused in my life. Breadth and internal indicators are on buy signals but the price action seems so choppy and other intermarket analysis suggest the trend should be down.
From a technical POV I would be very surprised to see a 80 point drop now.Looks like beginning of new uptrend for a couple of days.
GL
Tony,could this be the approx 20 point rally to 1350 before the 80 point down move -ABC zig zag?
LOL was just going to ask that
SPX has goe a bit more than expected … nearly 30 points.Quite overbought, short term, and it maybe R2D2 time.
Tony, does that mean you think it will just keep rising, or you are ready for a pretty impulsive move back down??
the latter
Well, things look more clear now, Tony… and it looks the game is starting again
=)
I guess day traders must be shorting the market, so do I.
GL
Tony,
From yesterday’s commentary, I believe you were expecting a zig-zag correction higher to about 1345 (20-point rally from the low) then another five waves lower. With SPX reaching over 1352 in the opening minutes, has your perspective changed? Correct me if I misinterpreted your analysis.
looks like a pretty impulsive move from 1325 as well
Even more so on the RUT … but this has been a tricky market with some wild swings.
RC —- Let’s hope for that pattern you recognized being the correct one!!!
Not changed at all.Bots swinging this market.
QE this weekend? check ou the USD. big move on no news
EUR not doing much
looks to me (a non EW view) like the whole move down from 1376 might have just been a gap closing from the 6/29 move. seems like this rally will have to peter out pretty quick for this move to more resemble mid sep 2011 rather than mid dec 2011.
this month’s move has two add’l similarities to the dec ’11 move rather than sep ’11 move: we’re still above a couple important MAs and the MACD is still above neutral. in sep ’11 neither were the case. just food for thought. -rc
Scotty, I’m wondering if you might be able to elaborate on your comment from yesterday:
scottycj1 says:
July 12, 2012 at 9:44 am
Everybody knows were making a low tomorrow …….right ?
I know you have a market map model that you run. Was this comment based on anything in particular? Or did you just intend on a no-risk, drive-by market call? ie, if it’s wrong we never hear about it again but if it’s right we’ll see a “Like I said…” comment today or monday
cheers
he has a move into 12000 dow expected thru 7/26… I am in hopes we do not see it… without higher prices at least first.
There’s a small cycle turn date today and one could expect this upside today to hold and continue into expiry week. Markets generally have a bias to the upside during the expiry week. That being said by the 18-19th there’s another small turn and I would be expecting a further turn down into the Bradley Indicator turn around the 26-27th. This is the major cycle turn of the year and should at the very least stop the downside into mid-August. My current target on the downside by near the end of July would be 1280-90. This completes the 45 day cycle and we should then see a stronger rally to complete the current 90 day cycle which maybe even reaches a new recent high in the 1375-85 area. Hope that helps. Alex
great color. thanks alex!
My views still same
5 down , 3 up, now 5 down
My latest chart
http://chart.ly/5ohfhk3
GOLD Time Ratio 161.8…
http://astrofibo.blogspot.ca/2012/07/gold-time-ratio-1618.html
Tony, just wonded where your data comes from for the 1933-46 Gold bull market?
The London Market Price seems to show a peak in 1940 not 1946.
It shows a 10 year bull market from 1930-1940, preceded by a mini-bull market in 1918-1920.
Alex,Was using an historical charting service and other data.Also noticed, using this service, a rise in Gold to $44 from 1940 to 1951.Conflicting data.How far back does the London PM fix go?And, do you have the data?
It goes back all the way to 1718!
The data is here:
http://www.measuringworth.com/datasets/gold/
It only gives you the yearly average; but better than nothing!
If you click on the Graphs option, try plotting US Long-Term Interest Rates against CPI Inflation, from 1798 to 2012.
I notice the inflationary peaks align very closely to the peaks and troughs in the Long-Term Interest Rate. This is true of the Gold price peaks in 1920, 1946 and 1980!
It appears the inflationary cycles are aligned to interest rate cycles; but with double the frequency: so you get two inflation cycles for one interest rate cycle.
I notice also that commodity bull markets in the past have all been sparked off by a sharp increase in yield-spreads, and the bull market ends during the narrowing phase, some years after a pair of lows on the short-term end.
These lows occurred in 1936, 1940, 1972, 1976, 2003 and 2011.
Long-term rates reached a trough in 1946, and a peak in 1981.
As you know, Short-Term Interest Rates often act as a leading indicator. So the low of 2011 most likely indicates a low in Long-Term rates is due in 5-6 years.
This should coincide with an inflationary spike, as it did in 1946. Suggests the Commodity Bull Market is not over, and should extend for several more years!
thanks Alex … will review over the weekend
Turtle Trend Analysis: INDIAN NIFTY last traded price: 5260.8. Current Hourly Trend: Down, Dynamic Trend SL: 5276.8. You may visit http://www.facebook.com/stockmaniacs?ref=ts. Visit http://stockmaniacs.net/blog/what-is-turtle-trading-system-download-free-amibroker-formula/
Ideally, I am looking for a short term continuation of the rally off today’s 1325 low. This should end at 1341-1342, and be followed by a final move down to 1318. This would complete a 5 wave sequence ( my model, not EW ), from the 1375 high. That should conclude the correction, and the uptrend from 1267 should resume.
If the short term rally extends beyond 1342, 1325 would be the 5 wave sequence low from 1375. Support is at 1323-1326, and then 1313-1315. Resistance is at 1337, and then 1357-1358.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/thursdays-market-071212.html
Whilst I would like a rally to sell my trapped longs, I struggle to see a rally whilst USD is rising and clearly hurting US multinational earnings amongst worsening recession in Southern Europe and global slowdown. Looks like USD is again headed to 88 at which point SPX should be much lower and QE3 hopefully comes on board. I struggle to see QE3 right now as FED likely to keep the amunition for when really needed.
Hi pas1968.
While longer term there is a correlation between market pricing and fundementals, this correlation doesn’t always hold in the short term. I would argue that the fundementals were lousy when the market was at 1422, and most people were calling for higher levels. That was when I said the market was due for a substantial correction. The fundementals were still lousy when the market stood at 1267. At that point I said I thought the market would rally while most people were looking for lower prices. I could very well be wrong this time, as I have been many times before. There is the possibility that most of the issues have already been discounted. And perhaps the hope of QE3 is putting a floor on the market. The more bad news we get, the more likely QE3 becomes.
And on a more cynical, and conspiritorial note, I find it hard to believe that the current administration is going to sit idly by and watch the market tank this close to an election.
I’m almost ashamed to admit it, but I don’t factor fundamentals into my model. It is strictly a mathematical model based on price action. I discovered long ago that prices can move higher on bad news, and lower on good news. I figured I wasn’t smart enough to understand whatever was going on. I try to take as much thinking out of the process as I can.
That said, I totally agree that the global economy looks like its a long way from recovery. And as I said, I could be totally wrong. All I can do is interpret my model as best I can, and hope I’m right more often than I’m wrong.
GL!
Steve
Thanks Tony. The Dow bounced off the 50% retracement today.
Does that have any significance within OEW?
If we had five waves up.But not under this configuration.
Sorry Tony
The choppiness has moved from ridiculous to absurd.
The only only good news is the hourly macd and histogram turned bullish at the end of the day.
And the spx bounced off the rising 200 hour ma and lower 50 hour bb this morning and is traveling away.
I can see clearly the spx has dropped out of the old hourly trading channel and the new one points down.
Assuming 1325 is the bottom the next one would point up. Just to flatten the next one out the bears would have to drop the spx to 1260.
That shouldn’t happen because the trading Spx is still grinding away in the bottom of the upwards sloping daily trading channel generated from the 1158 nov/2011, 1422 apil 2012 and 1266 june 2012 pivots. A drop that low would fall out of the bottom of the daily trading channel.
But clearly the spx really needs a green day on Friday and when there’s a fomc meeting and qe3 doesn’t happen the spx has a hissyfit.
Thanks Tony!
SPX closed below that bottom trend line today & I think needs to close back above it soon otherwise opening up the real possibility of another leg down to at least test June lows if not lower.
Chinese data just released seems ok according to the headlines.
Wondering if China will outperform US in 2nd half.
US needs QE3 to stop the USD rising otherwise a further rising USD will continue to hurt US multinational earnings in 2nd half.
A difficult call for tomorrow…at least for me
I was expecting a rebound to abt 1340-1345…and it hit 1340 in the afternoon before reversing….
Now, the rebound could be done or it may go much higher …to abt 1350.
See you tomorrow
GL
Interesting that today the SPY closed below a solid 3-point trendline connecting June 4, 28, and yesterday (whole body of the candle was below the line). Also MACD crossover today, RSI at 50, and recent MA 50/20 crossover. Looks like a down move continues. Does that look right?
Sill new to TA and trying to learn from y’all.
dono
Sounds about right.Maybe sideways tomorrow first.
she will tip her hand soon either way mates
best
D
Im going intermedidately with a chop, flop, drop, then a pop
Hi Tony,
I am a little confused as over the last 3 days where you have been looking for these possible push downs and still discussing the bullish count as the primary, but then I see everythime we get the push down we get from a post as a seeing 5 down. So why are in this primary count anymore with 5 down? What am I missing or what is it that you would want to see to invalidate a five down?
I was tihnking that we have had an A B C down where the B wave ecompassed the most time (I belive your wave 3-4) to try to line up with your bullish thesis — a 3 3 5?
Doesn’t it seem that we need to start mdeling something different if you are seeing 5 down now as the primary? i am really new, so maybe you update these after the end of the week – not sure.
Thanks for your time.
Hi! We have had a bullish count because we are in an uptrend.The uptrend looked a bit sloppy even in the beginning so we offered an alternate ABC count.At first the ABC count was on the SPX charts, then moved over to the DOW charts.The two possibilities have remained even though we had been leaning to the bullish side.The recent decline suggest the market has more to go on the downside.Which again raises the probability of the ABC count. The weekend updates, last two cover these two scenarios.
NHGN – another way to get an insight to the market trend – in addition to OEW is -
develop a chart of the FAGIX:VUSTX – this can be done on stockcharts.com.
If you can, add an indicator, such as $SPX, or SSO. What you will see is a
structure called – Laundry Confidence Index – see how the 2 funds, compare
to the Confidence index.
Also – keep a record of Tony’s “swing points” useful to adding additional information
to you investments….hope that helps…Bud
2 setups still possible ES 1400 or ES 1140 – I favor 1140 but going be whipsaw action.
At a minimum we need to break above ES 1340 – to get a move going to upside. More likely we get a bounce and a failure
Also a break below ES 1305 would confirm a move to 1140 IMO – BUT will get a violent bounce to sell if that happens. A break above ES 1354 and we will likely get a violent pullback but 1400 is likely
Finally a retest / washout or whatever you want to call it.
However, a word of warning:
Although I can’t find a bullish count right now, a strong move often starts with a false break in the opposite direction. Either we had a false break of the bearish wedge today, or we did a backtest (kiss of death) with the rally today. Still cannot confirm either way.
thanks Tac