SHORT TERM: consolidation monday, DOW -50
Overnight the Asian markets were relatively flat -0.1%. European markets opened lower but also finshed about flat. US index futures were lower overnight. At 8:30 Retail sales were reported lower: -0.5% vs -0.2%, but the NY FED was reported higher: 7.4 vs 2.3. The market opened lower at SPX 1354 and continued to decline. The SPX had closed at 1357 on friday. By 10:00 the SPX hit its low for the day at 1349. Also at ten Business inventories were reported: +0.3% vs +0.4%. The market then rallied near friday’s high, hitting SPX 1357 at 11:30, before pulling back to 1351 by 12:30. Another rally attempt followed, which also ended at SPX 1357 by 2:30. Then the market dipped into a SPX 1354 close.
For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.35%. Bonds gained 7 ticks, Crude rose $1.25, Gold added $1, and the USD was lower. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. The market has remained between these pivots for nearly six weeks now. Short term momentum declined from being quite overbought on friday to neutral today. Tomorrow, the CPI at 8:30, Industrial production at 9:15, and the NAHB housing index at 10:00. Also, FED chairman Bernanke testifies before the Senate at 10:00.
The market opened lower today, traded down to SPX 1349, rallied to 1357, and then stayed in that range for the rest of the day. It was a fairly quiet day despite the lackluster report in retail sales. The SOX index, which has been sliding since its early July high, is getting close to confirming a downtrend. When this occurs that index should be on its way into the two-year Tech cycle low scheduled for this summer. When it bottoms the upsurge in the cycle should give quite a lift to the general market.
Short term support remains at SPX 1342/47, 1334/38, and 1324/27. Overhead resistance is at the 1363 and 1372 pivots. Short term momentum ended the day above neutral. The short term OEW charts remain positive with the swing point at SPX 1348. Best to your trading!
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market
Dow confirming a possible OCO (shoulder head shoulder)
link alalysys:
http://www.partnerinvestimentos.blogspot.com.br/
Hello Tony et al — does any of this lead to your bullish count or are you still somewhat leaning to the retrace into 1267? I saw you saying FEd is on cruise control and the next election would make or break the economy — I am guessing that you long term is bullish still? Maybe parsing too much. But am definitely interested in where you tihnk we are in your bullish count at a minro degree (do you do that) – thanks – hope i am not asking annoying request – if so please disregard.
Still looking for mid 1550′s by next year.Current uptrend still looks choppy and a reset to 1267 could set up a big advance.
20 point rip into pivot. I think we can get 10 back. Amazing volitility for a Vix 16?
wild day
Indices breaking into upward 3′s
http://www.wavegenius.com/2012/07/17/elliott-wave-midday-update-7-17-12-indices-breaking-into-upward-3s-youtube/
Possible OCO shoulder head shoulder in the dow jones
link analysys;
http://www.partnerinvestimentos.blogspot.com.br/
Much attention to a possible double top in the diary of Petrobras
link for analisys
http://www.partnerinvestimentos.blogspot.com.br/
how about them bots today…
and VIX obliterated
The vix is getting killed for sure. Too bad the uvxy and vxx suck for actually following the movements of the vix. I would go all in near these levels. I guess if it were that easy we’d all be rich.
living the vida loco
Thanks Tony, my stop was quite close to be hit early in the morning. Now, it looks this trade my be positive.
GL
bernanke transcript looks like more of the same. “prepared” to do, but no new plans
RC … FED on cruise control until after the election
Now the question is, how far do we fall today and tomorrow…… 1342 will come quite quickly I would think, then there is not much support until 1313
thx Hornet
agree with you there Tony. he seems to really be harping on the need for policy (fiscal) change and improvement before he’s willing to do his part again.
The FED can only do so much.The USG has done its share with huge deficits.Next administration will make or break the economy.
Could some kind person advise which of these two annotations is correct (in lurid purple):
Since the first triangle broke down, I’m wondering if the second triangle will break out to the upside to provide alternation?
In terms of previous patterns, the weekly MACD histogram looks bullish to me.
thanks Alex
N.B. WordPress seems to have shown one of my annotations as an image, and the other one as a link! Just follow the link to see the other one.
S&P 500 (1353.64) Nears ‘Ultimate’ Death Cross: SocGen
http://www.cnbc.com/id/48196972/
Another Hindenburg scare?
Morning
Dow and SPX both looking like they’ll start the bullish continuation part (break of right shoulder) of an intraday inverse head and shoulders developed the last 8 trading days
Sorry Tony
In case your wondering…
All that program trading hates to let trends become statistically significant, that’s why I use bollinger bands.
Libor scandal in Britain means British banks will be likely sued into bankruptcy, meaning a cascade of bank failures across the globe unless British tax payers pick up the tab. That’s why the probable bearish wedge in the spx.
Thanks Steve Krause: 1393 sounds good to me.
thx Rob, A sideways triangle after a rise is usually a pause before another rise.
Rob, existing law actually allows for the management of LIBOR as it was. It’s not ethical, but I highly doubt you’ll see anybody go under for it.
The market action from Friday’s 1358 high, in which a series of 5 wave sequences have formed, terminating in lower highs, and higher lows, indicates a powerful move is coming. It does, however leave open the possibility of that move accuring in either direction. A move above 1356.70 should mean a move to the upside, with 1393 remaining the target. A break of 1351.83 would mean a move to the downside, with support at 1338, 1323-1326,and 1313-1315.
A scenario is developing in which a move to 1393 at this point would signal an end to the 5 wave sequence from 1267, meaning the market could head much lower from there. If this is to play out, today’s 1348.51 low will hold, and the market will rise to 1393, or slightly beyond.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/mondays-market-071612.html
thanks Steve
Tony
I’m not used to the 5 min timescale so I don’t know if it’s an odd pattern.
In terms of the retail sales falling 5% in June, it makes sense. That’s what caused the lod in the morning.
Assuming the spx is a corrective bearish wedge rally, as it looks like it to me now because of the drop to 1325:
rally to 1363 topped out at the upper 200 hour bb
rally to 1374 popped the upper 200 hour bb a little bit to the upside.
This rally should be able to top out or pop a little bit to the upside the upper 200 hour upper bb.
So I don’t think it’s an odd pattern in terms of the news of the bad news of the day.
Tony
Looks to me like like the 5 minute bull market wave 2 correction was a 5 wave ascending triangle corrective pattern that started friday afternoon at the hod and ended at 3:45pm today at 1351.83 with the final 5th wave falling a little deeper than it should have.
Rob, Odd pattern for a wave 2.
From Bill Cara’s blog;
On July 6th we received the charts & notes on Wall Street Strategists asset allocation recommendation. Wall Street Stragetist Recommended Stock Allocation at 15 year low & Wall Street Stragetist Recommended Bond Allocation at 15 year high.
I wanted to post it immediately, but sentimentrader wanted to verify with Bloomberg that the data was accurate, which it is.
Here are a few notes from sentimentrader regarding the data:
This has to be a mistake.
If it’s not, we’re witnessing one of the more remarkable readings we’ve ever seen.
According to Bloomberg data, professional strategists on Wall Street have never detested stocks – or loved bonds – as much as they do now. It would be great to see this data back to 1970 or so, but unfortunately we only have it back to 1997.
Still, in that 15-year window the market has been hit with two major financial crises, two recessions, a horrid terrorist attack, fraud and machines running wild, among other maladies.
Yet strategists chose now to become the most pessimistic they’ve ever been in that time span. Not only that, but it was just the last week of June that saw such a huge drop, with their recommended allocation to stocks dropping from 51% to 41%.
That’s nearly a 20% decline in their recommended allocation, which is twice as large as any other one-week change. That’s why it seems like this might be a mistake…”
But it’s not a mistake.
If the herd is running into the long bond in record numbers driving it to new highs, upside is limited with risk elevated. Money will be moving away from bonds into risk assets, but the question is when?
thx Pas, we heard that last week too
Semiconductors took a bit of a beating (again) but could be forming a double bottom within a larger double bottom. Volume on SPY today suggested that we could be working on a re-accumulation pattern. However, we ended in limbo, in a perfect spot for an impulse up or down.
This E-wave (that’s how I see it anyways), can still reach a target of 1390. Today looks like it might have been some sort of right shoulder of a smaller inverted H&S, so unless Bernanke’s testimony tomorrow morning manages to upset traders (yet again), we have a good shot at fetching 1390.
The bear trap of last Thursday and the action of the Euro today seem to suggest that. The SOX is worrisome though, and suggests we pull back to retest 1267 eventually.
bearish harami put in today on the daily candles for all three major us indices. happy monday! -rc
Over the weekend my view was I’d be surprised to see 1364 get taken out at this time, so we will see I guess. I’m still holding pretty high cash balances in my portfolio and trading a bit here and there with maybe 5% of it, and maybe 15% -20% max in some longer term stocks.
This pattern since 1267 doesn’t look like wave 3…. but we will see, the market rules
Interesting observation about the rotation in the market -thanks Tony. Techs down, energy up…so, all in all, no complaints so far..
So now what? Down day today,turn around Tuesday for tomorrow for last pop up,anyone have any opinions? No big earnings after close…Mario nice call today wha tare you thinking tomorrow?
The SPX chart from 6/4/12 thru today, looks similar to the chart from 8/9/11 thru 9/16/11.
I have a cycle turn for Thursday, looking for a high around 1369. Will go short then, stop at 1370.50; I agree with Tony, we probably retest 1266. GL
thx Timing
Thanks Tony! Where’s Lee? He took the 108 temps with him, but left this unbearable humidity! Thanks Lee!
Georgia coast
http://www.bloomberg.com/news/2012-07-16/short-sales-on-nyse-top-2011-peak-as-september-bets-lost-21-1-.html
Short sales on the New York Stock Exchange have climbed above last September’s peak.
Shares borrowed and sold reached 5.35 percent of stock available for trading last month, according to data compiled by NYSE Euronext. (NYX) That eclipses 5.28 percent on Sept. 15, when bearish bets peaked last year.
SPX peaked at 1220 on Sept. 16 (and 20), and then fell until Oct. 4, bottoming at 1074.77; I’m looking for a similar reaction here. Bottom around Aug. 3, then up and away.
God invented the Stop to save our behinds when we are stupid.
He invented the Stop and Reverse so we could profit in spite of our stupidity.
GL