SHORT TERM: pullback continues, DOW -104
Last night FED governor Raskin’s speech was released: http://www.federalreserve.gov/newsevents/speech/raskin20120723a.htm. Overnight the Asian markets lost 0.4%. European markets opened higher but lost 0.7%. US index futures were lower overnight. This morning FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20120724a.htm. The market opened slightly higher at SPX 1352, then immediately began to pullback. The SPX had closed at 1351 yesterday. At 10:00 the FHFA housing index was reported higher: +0.8% vs +0.8%. The market continued lower until 11:00 when the SPX hit 1340. Then after a half hour bounce to SPX 1345, while european markets were closing, the market headed lower again. Nearing 3:30 the SPX hit 1329, and then bounced into a 1338 close.
For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.90%. Bonds gained 6 ticks, Crude added 60 cents, Gold added $5, and the USD was higher. Medium term support remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum is displaying a positive divergence at today’s lows. Tomorrow, New home sales at 10:00.
The market opened flat, then resumed its now four day decline. Just last thursday the market hit an uptrend high at SPX 1380. At today’s low the market had declined 51 points to SPX 1329. This is similar to the declines from the SPX 1363 high (54 pts.) and 1375 high (50 pts.) during this uptrend. The uptrend has certainly been choppy, but so far it has been symmetrical.
We have been carrying two potential short term counts within this uptrend. The one posted on the SPX charts, and the other on the DOW. The SPX count suggests the market may have completed a running flat from the SPX 1375 high, when the SPX came within 4 points of its previous 1325 low. This does not rule out another push lower tomorrow into the mid-lower 1320′s. The DOW count suggests the market is completing an irregular wave 2 flat, which started at the SPX 1363 high. Support here would be around SPX 1310. With the increased volatility in recent days we should have the answer this week.
Short term support is at SPX 1333/38, 1324/27 and the 1313 pivot. Overhead resistance is at SPX 1342/47, then the 1363 and 1372 pivots. Short term momentum displays a positive divergence. The short term OEW charts are still negatively biased with the swing level around SPX 1346. Best to your trading! AAPL earnings on deck.
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market
1344 is HWB for range 1422/1266. bullish above bearish below. Unfortunately we lost the 10 point bots. Adapt.
HDivot worked again … cheers!
Hey H D!
Just hanging with my little honey down south. Have u ever heard of “apple pie” moon shine? Good Lord I tell u what I’m a huge fan! But I have to learn to sip it
UR pivot is a magnet …..see yas soon
Tony: “AAPL following SOX ? ”
I don’t know maestro
We have been looking for two major cycles to hit a low, one in Commodities, which, IMO, is more important, and one in SOX
We have great potential for both
There, I think, is a lot of risk to recent lows on those two proving not to be the multi-year lows we expected
but, we have good entries and should be able to manage the positions
My personal wish is for a drop of S&P into 1250-1300 area while CRB and SOX hold above recent lows or just re-test. That should get enough bearish sentiment into the mix to drive a nice rally into fall
CRB’s potential for having had a low is greatly enhanced by the performance of producers, especially, some oil sands producers and also by activity around Nexen and Talisman
thanks
Gold is acting like the USD has peaked too. So far, SOX continues to make higher lows versus the SPX.Grains certainly helped the CRB.
and oil, CRB has quite a bit of oil
gold has been narrowing range
unfortunately, if it is only a technical move here and not a truly currency-liquidity-macro move, the narrowing range may be just a continuation pattern to resolve down — We shall soon know, I guess
Tony
SPX hourly macd has turned bullish
thx Rob
Tony, we should have a tony’s blog sentiment in here.
At this time, I would like to know if your followers are long, short or in cash; and what they expect abt the market in the short and medium term.
I feel it would be a very good indicator.
have a great day.
=)
Mario, Most posters here are day traders.After AAPL’s miss nearly every one of the comments, here and in the forum, were quite bearish.
which can raise the probability of a squeeze
AAPL following SOX ?
if my logic is correct , Fed meet is scheduled for 31st july / 1st august. Earlier markets have rallied before the event. hence i expect market to move up till the fed meet, and then fall. 1422 to 1267 is a 5 wave fall. 1267 on wards is corrective.post fed meet, i expect one more 5 wave fall. That would set a perfect launch for Q3 in September.
thanks Vikram
Heres an interesting 1;
J.P. Morgan: Democrat tax proposal would hit stocks up to 15%
The tax debate that’s percolating on Capitol Hill could have a big impact on stock market returns, one analyst says.
Hikes to the marginal high-income tax rate and capital gains tax rate by 5% and of the dividend tax rate by 24.5% — an idea bandied around by Democratic Party lawmakers — would hit the stock markets by 7% to 15%, according to a research note published by J.P. Morgan analyst Marko Kolanovic. Conversely, a Republican idea to cut the corporate tax rate by up to 10% would boost stocks by between 7% and 14%, he estimates.
Intraday upward .786 and downward 1.00 in S&P
http://www.wavegenius.com/2012/07/25/spx-2-day-visual-chart-upside-786-and-downward-1-00/
http://screencast.com/t/Zo4BYz19WAm1
nice. what signals a buy though? the middle sell could have been tricky
As I posted here yesterday afternoon, all downtrends since June lows have been limited to 4 trading days, yesterday was 4. We also filled a gap in the SPY chart yesterday. The last downtrend was also about 50 points, so a bounce 1-2 days is what I expected
I wouldnt yet pull out the rally flags
Nice call though by Tony on the Chip stocks, some nice bounces today
THink we will know more bull or bear after tomorrow
man the NAZ is just falling apart today. seems like there has been nothing but selling since the open.
7/24/12 Stock Market Update:
http://themarketsource.blogspot.com/
Tony, do you see 5 waves up on the DAX from the 6/5 low?
almost, but no on the DAX
GM all, 10 point dip here? What’s up Lee? Market fell apart when you left and look at what happens when you show up! USA.
OT- I’ll update that chart if we close above 1363 this week.
The data gets just a bit worse for the FED…. Sales of new single-family homes fell 8.4% in June to an annual rate of 350,000 after reaching a two-year high in May, the U.S. Commerce Department said Wednesday.
Bulls need to defend the pivot today I think. AAPL really dragging things down – without them I think we’d be off to the races today
RC,Semi’s gapped up as expected.
I did see that Tony. So far so good on that front. Is it enough to carry the rest of the market, or will the rest of the mkt weigh them down? Tough to say. Mkt feels like it’s def at an inflection point here around the all to familiar 1330′s. Choppy uptrend to continue or did the three tops form something of a (now broken) rising wedge…?
Hard to say in this chop-chop environment.Was AAPL the worse of the news?Semi’s seem to think so.Has the USD ended its Primary B wave?The 1313 pivot range is the line in the sand for uptrend.
Gartman says; the uptrends been broker decisively, but if the EUR rallies and the dollar weakens for a while a rally back to 1340 in the futures is possible and shoude be sold into then……
lots of bears
yes & maybe they will be right 1 day…. just hope I’m not around when they are right!
Gartman also said; Jon Hilsenrath article in the WSJ Re the FED seriously considering easing monetary policy….. his comments are not considered to be idle speculation but are instead accepted as near ‘gospel.’
Stick save Tony EsposiBOT
Dollar Hollar
HDIVOT™ nice job HD!
Time to sell USDs ?
If long USD ……I would Tony
Our resident currency expert just dumped a long term EURUSD short and USDCHF long position.
The Incremental Trader – ES (E-mini S&P500 futures) 25 July, 2012 pre-opening set-up
http://theincrementaltrader.blogspot.it/2012/07/es-25-july-2012-pre-opening-set-up.html
Comments are welcome.
Good things tend to happen to gold when this study gets to or below 6.. The BB Width study on a 3 day TOS chart shows gold’s next move will be a big break out and very soon. Whenever BB Width gets close to or just below the green line at 6, gold tends to make big upside breaks of hundreds of points. The current set up looks similar in ways to the back end of 2005 and 2007. Here’s the chart showing today’s set up http://www.screencast.com/t/yjFUbqmvQ4dA
Also of interest is a look at the slow stochastics on a monthly chart here http://screencast.com/t/GWJmDetN Although not at oversold below 20, its worked off its overbought condition and then some, like a reset, with price having given back very little.. It looks to me gold is poised for a big upside break out, and soon!
thanks Chairman
I’ve been watching the same uptrend channel. Also appeared to me that it would turn upward today.
Meant to say $SPX channel uptrend.
Turtle Trend Analysis: INDIAN NIFTY last traded price: 5100.5.Current Hourly Trend: Down, Dynamic Trend SL: 5152.95. You may visit http://www.facebook.com/stockmaniacs?ref=ts. Visit http://stockmaniacs.net/blog/what-is-turtle-trading-system-download-free-amibroker-formula/
Major turn date 8/12-13 and/or 8/25 due to Jupiter-Mars opposition square Neptune http://planetforecaster.blogspot.com/2012/07/major-turn-august-2012-jupiter-mars.html
What’s new guys ?
nice to hear from U Lee! Hey that’s the best news as far as we’re concerned here.
Other than that..the over-publicized GS short from a while ago appears to be working proving once again they’re doing God’s work 
…so Blankfein must be patting himself on the back…and Tony mentioned that U were doing ur own God’s work last week shorting the market..so congrats Lee! Hope ur having a wonderful time vacationing.
Hey C B!
I always ask WWBD
What Would Blankfein Do? We’re having a great vacation thanks!
haa… Lloyd, guess what? ..bad news…Lee’s already penetrated ur thinking and since ur only 5’6″ (on a good day), Lee can obvioulsy move much faster than you….sooo, advantage Lee!! Enjoy ur trip Lee!…stop by again soon..let us know what little Lloyd is planning …
Great comments all. went long in 401k starting wed am
Looks like I was COMPLETELY wrong about the last two days. I was looking for a move higher, and well………
There is still a possibility that the market is in wave 3 from 1267, with 1380 being wave 3 of 3, and today’s 1329.24 low completing wave 4. Wave 5 still projects to 1393-1395, so I am still looking at that level. If the market moves below the previous 1325 low, it would be most likely that 1380 completed a 5 wave sequence from 1267.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/tuesdays-market-072412.html
thanks Steve. Appreciate ur work..being early doesn’t mean being wrong… Now that they’ve kicked a lot of folks off the bus, the bus can easily move toward its destination again…oh, this market is sooo cruel..
Downward C and 3 targets for DOW SPX NASDAQ NDX
http://www.wavegenius.com/2012/07/24/elliott-wave-forecast-for-7-25-12-downward-3-and-c-targets-for-the-indices-youtube/
This – apparently Fed-inspired -leak today, sounds pretty straightforward, doesn’t it?
CNBC flashed it today shortly before the close, saying that they’d act either next week or in September….so the question is no longer “whether,” but when…that’s like a 100%certainty, imho. “Federal Reserve officials, impatient with the economy’s sluggish growth and high unemployment, are moving closer to taking new steps to spur activity and hiring.” http://online.wsj.com/article/SB10000872396390444025204577547173267325402.html
Hi,
isn’t a running flat very very rare for the 2 position? I was really looking forward to the weekend resolve…
think AAPL blew that possibility away
The count that captured my imagination and which I have been trading is HD’s from last week … his count essentially would be call intermediate B complete at last week’s high, and we are now in Intermediate C of Major 2 of Primary 3 … methinks I gt that right … at any rate, I’m looking for a Dow low between 11,750 and 11950 (or 11,778 and 11922, if you want a bit more precision). If I am not mistaken, this is the alt count that Tony is carrying on the NAZ charts.
Also, please note that I am a reactionary trader and a not a predictor … so while I may be short now, I may be long before tomorrow’s close. When I state targets for a low, it nothing more than some fib extensions and good ol’ fashioned support an resistance … I don’t look to get long or short anywhere before price starts acting right, i.e. I am a reactor, not a leader … follow me not!
HD … you should share that chart pic again … it is a work of art!
Tony,
It’s very likely tomorrow morning almost all, or all of the ^SOX 8% bounce will be retraced. This puts the 2 year cycle low kickoff seems in jeopardy.
By the looks of INTC that certainly is a possibility. If so, will wait for the next setup
Thanks Tony!
So you are no longer carrying any count on the SPX or Dow that would accomodate a re-test of the 6/4 low or lower? But that is the count you are showing on the NAZ, right?
Yes, that’s an alternate count
No need to look for a low until this market regains its ability to close on its lows … It needs of full tank of committed shorts to bottom, and right now it is habitually burning off more than half of its supply of “rally fuel” during the day.
This is what happens when central banksters become day traders.
Looks like we will break below ES 1305 that should trigger a short cov rally up to 1335-1340 then the real drop takes place
AAPL carnage. *sigh*. gonna be another long day tomorrow. thanks for the post Tony!
Cheaper prices. I am not afraid to buy into a bloodbath, especially if we can hold 1292.
Hello Tony,
those are some interesting counts. I hadn’t considered that possibility before.
I nibbled on a few more longs today, since I saw some short term bottoming action (proven to be correct by price). And because I saw deceleration (usually you can see divergences just by eyeballing price, if its too small to see it might not matter).
Great post!
Hello Tac and Tony,
The SPY closed at 133.93 on my quote screen and is now hovering around 132.90 — a one-point loss that represents about 10 SPX points. I’m not sure what cause the drop — maybe a reaction to the AAPL report. If the loss holds into tomorrow morning, we’ll have yet another gap-down opening. I see some potential positive divergences on my hourly ES chart so we could see a bounce that will take the strain of the selling.
I also see some deceleration on the cash charts but, overall, the price action looks impulsive and I expect no more than a bounce and a resumption of the selling. RUT has taken out its prior low at 778.54 and has formed a downward-biased channel. RUT hasn’t made a fresh high since the March 27 peak of 847.92 — it’s becoming difficult to think of this market at bullish when the small caps haven’t made a new high in nearly four months.
I am hoping for the best here but, frankly, the charts are leaving much room for optimism.
Understood. I have been calling for a retest of the low for weeks on end. I had this whole up thingy as a B wave triangle with nice corrective waves. I told people to sell last week Thursday and I think we have a good chance to see 1290ish as a C=0.618 of A (I have 1416 as the failed 5th, most people see it as 2).
Either way, if we hold above the June low, it will be a great time to buy long.
Too late to short now anyways. If it bounces weakly, you could.
SPY tracks the futures.Agree, the AAPL miss certainly has not helped matters.
RUT reached the 765 area today which puts in right on the daily lower Bollinger Band — it’s already taken out its 50- and 200-day MAs. I do expect a bounce soon despite the negative reaction to AAPL earnings. RUT has a couple of open gaps overhead and it is possible that it may fill the closer gap near 792 — but the selling may kick in before it gets there.
Some good news from the Fed or from Europe could head off the selling before it gets out of hand but, like you, I expect significantly lower prices after a bounce.