SHORT TERM: SPX hits uptrend high, DOW +103
Overnight the Asian markets were -0.3%. Europe opened higher and ended +1.5%. US index futures were lower overnight. At 8:30 Housing starts were reported higher: 760K vs 708K, but Building permits slipped: 755K vs 780K. The market opened lower at SPX 1360, and dipped to 1359 in the first few minutes. The SPX had closed at 1364 yesterday. Right after the open the SOX index (semiconductors) started to rally, and the stock market went right with it. We have been tracking the SOX lately, waiting for the two-year cycle low. Around 12:30 the SOX was up over 4.0%, and the SPX retested its 1375 uptrend high. Then the market started to pullback. At 2:00 the FED released its beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201207.htm. The pullback continued until 2:30 when the SPX hit 1369. The market then tried to resume its rally, but ended the day at SPX 1373 nudging just above the next pivot.
For the day the SPX/DOW were +0.75%, and the NDX/NAZ were +1.20%. Bonds gained 3 ticks, Crude added 65 cents, Gold slipped $4, and the USD was lower. Support for the SPX moves up to the 1372 and 1363 pivots, with resistance now at the 1386 pivot and SPX 1402/03. Short term momentum was again quite overbought today before turning lower. Tomorrow, weekly Jobless claims at 8:30, then the Philly FED, Leading indicators and Existing home sales at 10:00.
Interesting day, and maybe a key one at that. After a lower opening the market started to rally along with the semiconductor SOX index. That index was +3.6% today. We have been waiting for the two year cycle low in the Tech stocks. Typically, the SOX index rises about 50%, over a 6 to 12 month period, after the cycle bottoms. And, it takes the Tech sector with it. This is usually quite a positive event for the general stock market as well. Major wave 3, of Primary I, kicked into gear after the last two year tech cycle low. Today’s action in the SOX suggests that low might have occurred yesterday. Suggest, as we noted in the comments this AM, everyone keep an eye on the SOX over the next several days.
As a result of today’s action we have upgraded the DOW charts to reflect a more positive count. We are no longer expecting a new downtrend to eventually unfold and retest the SPX 1267 low. Worse case scenario, at this point, would be a retest of SPX 1309 to complete an irregular Intermediate wave ii. However if the SOX index continues its rally, then the current count posted on the SPX charts would likely be correct. We are now giving equal weight to both of the posted SPX and DOW counts.
Short term support for the SPX is at the 1372 and 1363 pivots then SPX 1342/47. Overhead resistance is at the 1386 pivot, SPX 1402/03 and SPX 1422. Short term momentum ended the day near overbought. The short term OEW charts remain positive with the swing point now at SPX 1355. Best to your trading!
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market
Dow Jones going to comply with technical objective of the double top
We have an online translator on the blog and the analysis of the chart on the link below
http://www.partnerinvestimentos.blogspot.com
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.
dear friends, you find the link below to analyze the dow and the blog page you can use online translator.
http://www.partnerinvestimentos.blogspot.com.br/
SPX hourly macd histogram was negative for the 3:00 pm candlestick.
SPX is running out of momo at the upper 200 hour bb. Need to turn that arround in the next hour.
Tony: “Even Gold is getting a pop ”
Did I not predict a very tough year for the Gold bugs after that vertical bust?
Just the nature of the beast
Now, there is an old saying that says gold is the last to the party
I have an extended version of that, saying, gold can be the last to a party especially if miners underperform
thx Piazzi
Definitely been right on Gold this year.
“”I ain’t scared to short that 1386 pivot.
”"
1380 area would set potential appearance of nice abc-x-abc with second abc equal in length to the first one
something for everyone today piazzi, Little bit of buyin and a little bit of sellin. Looks like support held again
S&P is in the timing band for a short-term or trading cycle low
1380-1390 area will give the appearance of balanced abc-x-abc pattern up that may start the move into the trading cycle low within the timing band
This is all theory of course, which is hoopla-hoopla at bets
price does what price does, the rest is just humbug
As expected and noted multiple times, like in here, http://caldaro.wordpress.com/2012/06/25/commodity-update, CRB was due for 3-yr cycle low as well an intermediate cycle low. The June 22 low has so far done very well
now, S&P is due for at least a short-term cycle low from here into end of July
With no central banker yet committed to any meaningful print endeavor, the behavior of recent low of CRB and the upcoming trading low of S&P (whenever it comes) should tell us the story of if market is OK enough on its own to run without extra help from some central banker’s printing room
so, either
1. market is good enough to run on its own
or
2. some other central banker dumps billions into the mix
or
3. Fed’s extended twist hold everything choppy in a wide range
or
4. we will see sub-1300 to try to force Fed into action
#1 please
LOL
that might require some signs of improving economy, especially from US
WLEI has been upticking for 4 weeks.
a-ha!
So, now that we’ve had a nice little sell off back to 1372, a nice rally into options expiration Friday? any body else share my speculation?
Tony,thank you for your post on SOX. I feel everytime I learn something new from your blog.
Thank you!
cheers Mini
Dow confirming a possible OCO (shoulder head shoulder)
link alalysys:
http://www.partnerinvestimentos.blogspot.com.br/
Range 1,371.21 – 1,380.39 same bots different day. I ain’t scared to short that 1386 pivot.
Neither are the Bots
$SPX within spittin’s distance of the upper channel
Small caps struggling to stay green,short term top may be in.
mkt sure not showing any signs of slowing down. are there any technical indicators left out there that aren’t pointing up now?
The 50/200 monthly Ultimate Death Cross
hah leave it to Tony to bust out a *monthly* death cross on me! i see it now, yes. i stand corrected!
Money flowing to tech … especially big cap tech … a hallmark of middle- to older aged bull is that large caps will typically outperform smallcaps, which has been the case since Oct 2011 … check out $SPX:$SML and $NDX:$RUT … the outperformance you note will likely continue through the end of the bull until we reach late stage primary V, then the big caps will start to break down and all kinds of microcap stuff will come to dominate the tape …
I learn something everyday here. TY optiontimer. Good info.
I can say the same thing HD, and a thank you right back to you as well … and of course to Tony for attracting such a good group of folks … this is a rarity in the world of trading the markets in the internet age.
Most of us here, are here to help others.
bad earnings. bad guidance. bad econ data. nothing seems to be able to phase this market!
if this is all QE trading, is it just me or is it a little early to be getting in that trade? i mean, wouldn’t you want to wait until we get a little closer to the meeting? if we rally like this there won’t be any QE
QE? We don’t need no stinkin’ QE …
oh, we definitely need QE. even by the Fed’s own admission/calculation, the market would be 40% lower right now had they never did QE.
i’m pretty sure we’d be considerably lower right now without the threat of QE
FEDspeak If the market buys the talk, no need to walk the walk.
The Fed has given themselves too much due … the market will always find the news catalysts it needs to justify where it is going … in the 50′s & 60′s it was industrial production … in the 70′s & 80′s it was money supply … then in the 90′s it was NFP … and since 2000 it has been FedSpeak … the market is going to do what it is going to do QE or no QE …
Actually, I agree with the FED’s assessment of the balance sheet expansion.Not only has QE helped, but it has helped the markets incrementally.
Well, we can’t agree on everything! You may be right, Tony. I tend to be in the camp that says the Fed over time has caused more trouble than its prevented or corrected, so my prejudice against the institution may be preventing me from giving it its due credit. But that’s one of the hazards of being a human beast:)
But the game is not over for them either.They still need to unwind all that excess stimulus they created, eventually.Hopefully they will do a bit better than they have, historically, in managing short term rates.
A properly drawn down trendline on the NDX (Naz 100) anchored on the 4/3 and 5/1 highs shows that big cap techs doing battle to break that line to the upside. A close above it today or in the near future, with a successful retest, would likely confirm the price action we saw in the Sox yesterday which continues today.
If this is a real bottom … there is a lot of money to be made in tech between now and Christmas.
Merry Christmas, Tony!
and Happy New Year Timer! The action in the SOX has already met what was expected off a cycle low.INTC is a bit weak today, so we may get a pullback soon.
I like pullbacks …
no pullbacks for you! [in the soup nazi voice]
Nothing but green this am. IBM: another big tech miss and once again rallying on the miss. Europe, what Europe?
Even Gold is getting a pop
must be all that “cash on the sidelines” the folks on cnbc have been talking about the last 3 years… hah
RC, that cash is all gone.They lent it to the government at 1.5% =)
Inflection point. We’re potentially finally sold out. Less than stellar news may not mean more selling. In fact if sold out it will now mean flat to up on bad news and up huge on good – the hallmark of a bull. Cheap valuations, record cash, big insider buying, dour sentiment with a priced in Lehman style event (with no event) will eventually lead to huge market upside from here. – possibly even if we GET the event. This may or may not be the next leg higher – but its coming.
thanks Tommy
agree tommy. see posts from yest
It seems market direction change sync with moon phases. http://www.optioninvestor.com/oin/images/commentary/mwrap/2012-07-18-19-36-35/2012-07-18-19-36-35-455.png
Appears to have zero net correlation. Looks correlated through last November, then no correlation through the April top then correlated again through recent. Coincident at best.
Turtle Trend Analysis: INDIAN NIFTY last traded price: 5251.5.Current Hourly Trend: Up, Dynamic Trend SL: 5177.25. You may visit http://www.facebook.com/stockmaniacs?ref=ts. Visit http://stockmaniacs.net/blog/what-is-turtle-trading-system-download-free-amibroker-formula/
For anyone interested, here is the update to my count which shows 1393 as a possible wave 5 high from 1267.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/medium-term-update-071812.html
Thanks for sharing ur work with us, Steve. Very interesting!
JMHO
http://flic.kr/p/czFz2L
Thanks H D.
Steve
haa..’last chart” .. good 1, HD!, thanks !
Thanks Tony
“Rob, Two points.Wave 4′s can not overlap wave 1′s, and Wave 3′s can not be the shortest.”
regarding wave 4 overlapping wave 1: I think I see what you mean. I’d guess it’s an elliot wave rule of thumb I’m not aware of.
In my final weekly wave 5 in the old 2002 to 2007 bull market, it started in the summer of 2006 and ended in october 2007 my daily wave 4 of 5 correction from July 1555 to August 2007 1370 overlapped daily wave 1 of 5 that started in the summer of 2006 and almost overlapped all of my daily wave 2 of 5 in march 2007 correction.
Does that rule of thumb also apply to topping formations? like H&S double and triple tops? In that bull market wave 1 of 5 extended and produced a beautiful blow off top. Something this bull market clearly lacks.
regarding Wave 3′s can not be the shortest.
In this bull market:
My wave 1 of 5 is the same as yours: 1074 to 1292: 218 points.
My wave 3 of 5 is the same as yours: 1158 to 1422 264 points.
Sorry if I’m being a pain in the butt and getting on your nerves.
Hi Tony,
Just heard a forecast today for 10 yr bond yield to go down to 1.25 later this year. I would like to get your thought on this? Thanks.
CT
Saw that too.Guess he’s long bonds
Tony,the way the market is shaping up,i think my target of 1400 might be too pessimistic.I think we could hit 1500+ count before the election results.I think you have a target of 1525+ in your long term SPX count?
1499 by year end, when everyone was bearish
Sorry guys, I am still bearish. Medium and long term bearish.
I’ll give the market two weeks to show me I am wrong.
GL
Tony
Wave 3 of the spx 5 minute bull market started at 1345.07 at 10:50 am on Tuesday.
Sub wave 1 ended at 1365.36 at 3:00 pm on Tuesday
Sub wave 2 ended at 1358.96 at 9:35 am on Wednesday
Sub wave 3 ended at 1375.26 at 12:25 on Wednesday
Sub wave 4 ended at 1368.70 at 2:45 pm on Wednesday
Sub wave 5 is underway.
If I put a 60,130,45 macd on the daily chart. That is a smoothed out version of the weekly macd.
At 1422 in April, it’s bullish.
At 1357 in April, it’s bullish and getting weaker.
At 1415 in May it’s still bullish and getting very weak.
At 1266 it’s bearish.
That’s why I think 1266 is a wave 4 and not a wave A.
Rob, Two points.Wave 4′s can not overlap wave 1′s, andWave 3′s can not be the shortest.
Hi Tony! Question — while Wave 3′s “cannot be the shortest,” it’s also true that Wave 3′s do not have to be the longest, correct? In other words, is it correct that a wave 1 can be longer than wave 3, so long as wave 5 is shorter than wave 3? (Or else wave 5 > wave 3 > wave 1?) Also, I assume you are not counting waves 2 or 4 when considering which is the shortest wave, right?
Hope those questions make sense. Thanks! – L.A. Dad
Hi LA, Correct!Wave 3 can be shorter than waves 1 or 5, but not both.Wave 2 can not fully retrace wave 1.Wave 4 can not overlap wave 1.
I forgot to add to my question — i reviewed the DOW and NDX charts you provided… It seems we need to either flat or do a running correction for them to put in their “ii”…. Is that correct? Would that mean that we should expect a retest to ii at some point soon – perhaps after this week? That way all indices are all in alignment?? Thanks man… So helpful
If the SOX is not done going down a flat at wave ii would set things up.
Nhgn…..I invest in Shanghai equities, and I am invested in Beijing Bank 601169.
Bud – FYI….
Thanks much Bud– they need ease to help… Have a good night!
Tony – do you have a chart/count on China — should it be turning soon? Should we expect it to at least have a reflex bounce into year end to help support our markets? Do we need it? Thx
NHGN, Do not see much on the charts for China in the near futurehttp://stockcharts.com/h-sc/ui?s=$SSEC&p=W&st=2005-01-01&id=p78365136523&a=71070734&listNum=11Looks like it is caught in the Japan Nikkei syndrome.
Thanks Tony!
What do you make of the glaring divergences amongst the indices? SPX bettered its July 3 high; but the Dow, Nasdaq, and Russell have not.
Not a problem yet
Watching ES…can it better the July 5 high at 1375?
I have been targeting the 1393 level for some time, and it looks like it is finally within reach. The way this market has been going, that probably means we will never see it. Never the less, that seems like an important level. I would expect a correction from there, but I don’t see this as the end of the meve from 1267. It should be interesting if we get there.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/wednesdays-market-07182012.html
What a difference a strong performance of Intel (major component of SOX) makes. I was lucky and could buy back my $25 naked puts for $0.03 today. SOX needs some decent follow through. However, keep in mind that SOX is still setting up a potential super bearish 3 year Head and Shoulders pattern and that it’s relative performance (sox/spx) already broke. (won’t keep my from selling puts again should we dip again, consistency wins and I like INTC)
Today was bullish. Good volume, good price action. AAPL lacking could still be a bit of a warning.
My post might suggest otherwise, but I drew this picture more than a week ago and I stand by it:
http://tacticalstrategist.com/2012/07/11/potential-e-wave-bounce-update-2012-07-11/
The weis wave volume is still declining, very much in line with being an E-wave of a triangle. Wave volume seems to reject any notion of this being a third wave or of any kind.
ASTRO Longitude Mars 180 Uranus 2000-12…
http://astrofibo.blogspot.ca/2012/07/astro-longitude-mars-180-uranus-2000-12.html
Once again — i have no idea what you are saying… Why not add text to this so we can follow all of your hard work? Those that can read it – probably know how to do it by themselves. Hope you do not take this badly.
I am just showing the relation of the aspect Mars 180 Uranus with the SP500…we have that aspect tomorrow…High?…
Astro pointed out a lower direction in a C wave down this morning as we rallied higher all day. Not sure how to take his analysis. Guess like anyone else’s it just a suggestion.