SHORT TERM: gap up opening, DOW +78
Overnight the Asian markets ended higher +0.7%. European markets opened higher but lost 0.2%. US index futures were higher overnight. At 8:30 the CPI was reported: +0.2% vs +0.2%, and at 9:15 Industrial production was reported higher: +0.4% vs -0.1%: http://www.federalreserve.gov/releases/g17/current/. The market gapped up at the open to SPX 1359, and hit 1361 in the opening minutes before starting to pullback. The SPX had closed at 1354 yesterday. At 10:00 the NAHB index was reported at its highest level since 2007: 35 vs 29, and FED chairman Bernanke’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/bernanke20120717a.htm. The pullback continued until around 10:30 when the SPX hit 1345. Then the market reversed again and started to rally. With 2-3 point pullbacks along the way the market rallied to SPX 1365. Then dipped to close at SPX 1364.
For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.50%. Bonds lost 9 ticks, Crude added 50 cents, Gold slid $8, and the USD was higher. Support for the SPX remains jumps to the 1363 and 1313 pivots, with resistance at the 1372 and 1386 pivots. Short term momentum posted a negative divergence this morning, dropped, and is noe creating another negative divergence. Tomorrow, Housing starts and Building permits at 8:30, then the FED’s beige book at 2:00.
Somewhat of a wild ride today. Market gapped up at the open, hit the 1363 pivot range, and then immediately dropped to short term support at SPX 1342/47. After that it rallied right back to the 1363 pivot range, making a higher high on the day. The choppy action in this uptrend continues. Now that the SOX index has confirmed a downtrend, suggesting it is heading into its 2-year cycle low. This should put some pressure on the current general market uptrend.
Short term support is now at the 1363 pivot, then SPX 1342/47 and 1333/38. Overhead resistance is at the 1372 and 1386 pivots. Short term momentum appears to be setting up another negative divergence. The short term OEW charts remain positive with the swing point around 1350. Best to your trading!
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market
Dow Jones broke a possible OCO (shoulder head shoulder), but set up a possible double top that could probably start or unconfigure from today. If the dow could isolate the top test case meets 13.127k 12.565k test may come.
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Dow confirming a possible OCO (shoulder head shoulder)
link alalysys:
http://www.partnerinvestimentos.blogspot.com.br/
The vix has not stopped going down. There has to be some sort of volatility come in soon.
GOt a letter from Neowave/Glenn Neely… He has us moving toward end of year with a 1495 SPX projection like your bull case just out.. Stops are at 1319 spx… fwiw… C’mon T-Rock Tony – say it is so
That makes me nervous
Ha…Ha..Ha..
A SOX close above 363 would be preferable to its having crossed up through it and then close back below it. A close above would likely confirm a reversal, whereas a close below after a probe above has a bit of the “broken support now retested as resistance” character to it.
tend to agree
+1 for Bulls.
Looks like they are gunning for 1400 target and trendline – H&S pattern.
Pivot 1372 cleared
If the economy is doing better and the market should be moving higher to lead the economy one would think that the Dow Transports should be doing better. Especially considering that energy costs have come down so much.
yes, they have been lagging
AAPL is not participating in this rally.
Thanks Tony,I think the key point here is for the bulls to not get too excited.I dont think we are still out of the woods as yet.
Me neither.Running into resistance at 1375, then around 1390 on the channel.Should it clear those two hurdles then it could run.
Tony,
Also take note of the McClellan Oscillator. The last time SPX was near 1375, McO was about 287 — this time, it’s near 106.
That’s good right?
The McClellan Oscillator is substantially lagging price performance — this suggests a lack of fundamental support for the current rally. If price rolls over from here, the McClellan Oscillator will display a glaring negative divergence.
To answer your question about whether this is good, I would say “yes,” it is quite good if you enjoy non-confirmation of rallies.
thanks
On the MO you need to look at the “Ratio adjusted net advances” (RANA). Just because the Osc is at a lower level given the same SPX level could be bullish, bearish or meaningless. Lots depends on the direction as much or more than the level as well.
Tony,looks to me a perfect zigzag completed at 1372 SPX.Would be interesting to see if market takes on 1386 at which point 1400+ would have very high probability.What do you think?
Mini, Think today’s move in the SOX has to be respected.Next few days should be the tell.
I agree … chips rallying hard in spite of not terribly supportive news … ’tis the stuff bottoms are made from … it is almost as if the market had been waiting for some sort of tech cycle low or something
i think the resounding break of 1362 on the upside was very important. 1380-1400 looks quick and easy to me from here. C=A at about 1406, C=76.4% of A at 1383. seems like a reasonable band for the next two-three weeks
RC … watch the SOX
1369 achieved. Stop and reverse 1370.50. GL
10 Range 1,358.96 – 1,369.91, same bots different day. I don’t see anything in pattern to suggest anything but C up. Maybe only double top or 1444 still GL
counting rallies from 1266, this is 5th rally, each aprox 5days and aprox 60 points. We have now gone 50 points in 4 days
that puts bullseye “no pun” on 1386 pivot IMO
Also, the channel range
thanks guys! plus this weekly TL, fwiw. http://screencast.com/t/FgPeHhjca
…a busted inv H+S on the daily that is of the sideways variety, perhaps, measuring around 120 pts. ..you do the numbers guys… http://screencast.com/t/A4Ui41jtV2ex
but wait, there is more
aside from EW counts, does anybody see any other traditional technical indicators that suggest this is not a longer uptrend building strength?
earnings are bad and folks are buying up stocks like there’s no tomorrow. check out HON today. i just got off their conference call. that stock has no business being up over 5%. and INTC rallying on their numbers? just doesn’t feel like a bearish environment with those kind of moves.
betting on the second half?
well, both companies – as have most – gave lower/worse outlook for 2H12. so it just looks to me like the mkt could be done selling the bad news. expectations already so low that when INTC lowers guidance they rally over 2%…?
if that’s true, how do we not continue to rally? rally on bad means you can rally on less bad and really rally on good news.
Hard to tell.The market held up well while semi’s dropped hard this month.Next few days into next week should clear the picture a bit.
INTC trades at about an 11 PE. Maybe the spirits will finally be changing to where they permit some of these profitable companies trade at something closer to 15-18 PEs again? Not suggesting anything ridiculous – just maybe mid teens type valuations.
Lots of stocks are trading under market multiples
Love oneself, or love oneself and all others. It’s a choice. Your future depends on it. Time is short. Make the choice!
Yesterday was the first real sign of institutional accumulation since the 6/29 blast off – other than yesterday, price/volume action since 6/29 has largely given the appearance of institutions lightening positions.
June-July has been a tough market … we appear to be at a market point where even the smart money isn’t quite sure in which way to place their bets. And if they can’t figure it out, what chance does an a dummy like me stand?
thanks Timer … we all get humbled sooner or later
another new uptrend high on the NAZ just now. with (despite) INTC missing earnings, seems like the mkt has no signs of wanting to abate here
INTC didn’t miss – they BEAT. They guided 2012 slightly lower than earlier this year…
http://www.fool.com/investing/general/2012/07/18/intel-beats-analyst-estimates-on-eps.aspx
This is what its come to … I have been reduced to day trading … I can’t seem to catch a trend that lasts more than half a session!
SP500 Time Ratio 161.8…
http://astrofibo.blogspot.ca/2012/07/sp500-time-ratio-1618_18.html
Hi Tony
I don’t do Elliott Wave as you might recall but I do use my market timing indicators and presently they are still pointing to the market gradually moving higher from here. Momentum which has been positive since June 26 turned negative on Monday and continues negative today. There may be some weakness as the market direction climbs as the ultimate oscillator and fast stochastic are both showing mildly overbought conditions. http://www.fullyinformed.com/market-direction-is-solidly-up-confirmed-by-market-timing-indicators/
My two cents worth – market direction is up but as you say, choppy. I love comparing your wave readings to the technical indicator I use. Slowly I am catching on to this Elliott Wave Theory.
thanks Teddi
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I still think the market is headed to 1393, but it may be a bumpy road all the way up to that level. Looks like wave 1 from 1325 ended at 1361. From there it looks like a complex corrective wave is forming. Support is at 1357-1358, 1337, and 1323-1326. Resistanve is at 1367, and then 1387-1397.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/tuesdays-market-071712.html
thanks Steve
another lose =(
I give up, Tony….I will stay in cash for the rest of july,
GL
Tony Sorry for the elementary question, but could you explain what you mean by “negative divergence” Also, with sox are you looking for market to go down? Thanks!
Hi Les, A negative divergence occurs when prices make a higher high on lower momentum.Look at the RSI on this chart. – div noted in red, + div noted in green. http://stockcharts.com/h-sc/ui?s=$SPX&p=60&b=1&g=0&id=p78440107652&a=67036679&listNum=11
Tony
Wave 2 correction ended at the lod this morning and was a flat or a zigzag. SPX 5 min bull market is in wave 3.
If I think about it, the fib retracement to 1325 is bearish, but doesn’t mean it’s fatal. If I look at the 5,13,20 and 50 ema’s it’s very bullish for the first time in a long time
GL Rob
Yes, keep playing the bull count until it doesn’t work. 80 week low was due late June – early July. Been bullish on equiites and Crude since the last week of June. Hope it continues. I see the caveats, but for now buying dips continue to work. This could be dynamite it the most bullish count plays out.
thanks Tony!
Excellent New Trading Indicator
http://www.markethighsandlows.wordpress.com
Hey what ever happened to that guy that wants you to buy him coffee,seems he is only around when market is in bull run,name is Ted or Sam A.
I just happened to notice that the period from 6/19 – 7/12 on the S&P looks like a running flat: Three waves down, three waves up, then a five wave impulse down.
Samuel
Hi Tony… May I ask the timing for when the SOX 2 year cycle low comes into play before starting to rise again? Also – do you perform timing on when you beleive the SPX will retest the lows? Thnak you.
Gplan,one more pop highertomorrow?
Originally thought it would occur in Julyhttp://caldaro.wordpress.com/2012/06/27/two-year-tech-cycle/Now thinking August, like last time
Tony, would you think that the vix vehicles should be ready to pop now? Charts seem to lend that way though they are not the best tools.
Travis,Market has been range bound for 6 weeks … VIX contracting
Sorry to ask but not understood…contracting would mean vix ready to pop or no?
Until the range changes VIX will probably continue to decline It’s a measurement of volatility over a period of time.Implied VOL right now is about 1% per day.
Opp’s
Thanks Tony!
Can you expound on your statement from the last thread, “Next administration will make or break the economy.”
Timing, FDR had the New DealReagan had Supply Side EconomicsThe next PREZ needs a strategy, just as powerful, to end the secular bear cycle.
…we are sooooooooo screwed …
Gotcha Tony. Thanks.