SHORT TERM: new uptrend highs, DOW +21
Overnight the Asian markets gained 1.7%. Europe opened lower but gained 0.7%. US index futures were higher overnight as well. At 9:00 FED chairman Bernanke’s speech: http://www.federalreserve.gov/newsevents/speech/bernanke20120806a.htm. The market opened higher at SPX 1394 and continued to rally. The SPX had closed at 1391 on friday. At 10:30 the SPX hit 1400 for the first time in three months. A small 3 point pullback followed to SPX 1397 by 11:30. Then the market tried to rally again. At 1:30 again SPX 1400 offered resistance, then the market pulled back to close at 1394.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.70%. Bonds gained 7 ticks, Crude added 70 cents, Gold rallied $7, and the USD was lower. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum ended the day at neutral. Tomorrow, a speech from FED chairman Bernanke at 2:30, then Consumer credit at 3:00.
The market opened the week higher, rallied to SPX 1400, a new uptrend high, then pulled back to where it opened at SPX 1394. This is still a minor pullback. From the recent low at SPX 1355 the market has rallied 45 points without one notable pullback. The previous rally, SPX 1329-1390, had two notable pullbacks of 12 and 11 points. And, the one prior to that, SPX 1310-1375, had two notable pullbacks as well: 21 and 11 points. With the market currently having a difficult time clearing the SPX 1402/03 resistance area possibly a pullback is in order.
Short term support is at the 1386 and 1372 pivots, with resistance at SPX 1402/03 and 1413/15. Short term momentum is declining from quite overbought. The short term OEW charts remain positive with the swing point now at SPX 1379. Best to your trading!
MEDIUM TERM: new uptrend high
LONG TERM: bull market
Hey C B
There’s plenty of chefs as far as SPX goes. I think u smell what Tony’s cooking. I buy dips and sell rallys using my © 20/20 system. I’m not trading ES till its circus time again
Lee, yes many cooks, but you have ur special secret ingredients and you trade like you give a damn..
so I am always tickled whenever you have time to stop by and give us ur take… I understand that ur not available all the time, so I just have to stumble as best I can most of the time ..talk to you soon Lee.. enjoy ur fishing expedition 
)
if u notice the pattern,bears are getting stronger and stronger on each close.Would be interesting to see if this is just trasing or will it be a get ready for the real flush?
agree. thanks Mini. Also (-) cross on 60 min MACD
oh and Tony’s used his red marker on the RSI…that’s a good one..thanks Tony.
day’s low in ES was 1387.50— maybe something wrong w my quotes, though
range just before the cash open
thanks Tony.
Tony: “Will let you in on a little secret.The 20th century bull market was fueled by consumer credit … buy now pay later.”
There was a time when the world operated on economic demand and supply principle
the world then grew into credit cycle dynamic with economy a first derivative of credit cycle
it then moved to liquidity cycle with credit a first derivative and economy a second derivative of liquidity
As far as markets are concerned, it is the liquidity and the rest, credit and economy, are nice to have but not essential
as far as academia and pundits and blah-blah-analysts are concerned, well, who cares? it is the price of the market we play not the verbiage of academia nor the angst of the pundits nor the blah-blah of the analysts
BTW, I don’t think there is a way back from liquidity cycle norm to previous modes of operation — not without a definitive resolution to all the debt that is being transferred to national balance sheets — just MHO
Inflating ones way out of debt takes decades.In the meantime the FED has to provide the lubricant to keep the engine running.
debt is either
1. paid — good luck with that
2. defaulted
3. inflated away
since we are in a purely fiat world and since debt is the essence of fiat, I think every attempt will be made to preserve the system by not destroying (or defaulting) the debt
There is always a possibility of a total failure of the system and all the attempts to save it, but, IMHO, the attempts will be made to hold the system and inflate the debt because inflating the debt will be akin to re-floating the system
exactly
Piazzi, you were on to this years ago … kudos!
thanks for reminding us Piazzi. Looking at them (numbers) right now…and not particulalry liking them ..still a -div there. though..it’ll work sooner or later… And we’ve all been taught that the thing about liquidity is that it can disappear overnight…so we live in dangerous times..
Depends ….awful busy on the highs very quiet on the lows here today. R2 and .618 back were @ 1398 ESU. I don’t have live quotes but Id guess itll be support
Low so far ES 1397.50
Thats the opening range uh oh …is this a new pattern? 2 days in a row now
hahaha … you noticed it too
Just playing around keeping bears in the game
Theres a pullback….whos buying?
8 handle range ..bots not in trouble yet.
If I get caught in a perfect storm just know that there’s no perfect trading in SPX . Lake is behaving so far
2 more handles … SPX 1400 by the close?
thank U Captain Lee!
..prbly unwise of me not to buy this bullish “event”…..but in (-) div., I trust…..
Smart money is out Dr Cl😝
interesting data on that fluctuating short interest. thanks guys.
Tony, when you get a chance, what do you think about that “open-ended” easing… http://www.bloomberg.com/news/2012-08-07/fed-s-rosengren-urges-open-ended-easing-program.html
Doesn’t it sound like we’re going Japanese, and the Fed is admitting it..ie. starting to accept the never-ending (nature of the )solution to the never-ending problem (deflationart bust)? thanks.
sorry.typo…shld have read : deflationary
Think Rosengren needs to review what the ECB has done since 2009.An open ended approach only increases the balance sheet with no major impact economically.The market wants hard numbers. For example;”Over the next 12 months we, the FED, are going to buy $1 tln in Gov’t bonds.This should raise GDP to 3.5%, and the SPX to 2100 during the next 12-24 months. Do not be left behind!But remember to take profits in early spring and re-enter in the summer. Good luck.”
with ur great command of the numbers, the fabulous Fed boys are gonna come
a -knocking at ur door and offer you a corner office one of these days Tony =) …nice job with those #s , thanks!…still the whole thing smacks of central planning for the foreseeable future..it’s lika Obama saying…”if you’ve built a business, you didn’t do it”….WE did it for you… yeah, right..
CB, Will let you in on a little secret.The 20th century bull market was fueled by consumer credit … buy now pay later.The 21st century bull market will be fueled by liquidity … we, the FED, are in control.http://www.youtube.com/watch?v=4sDOwbYnvP4
CB, If the FED ever got a hold of OEW the DOW would be at 100,000 in no time.
haaa..funny….yup I really have a problem with those guys taking over free markets…can’t help it.
When I was young, and before, we had a market of stocks.Since the 1980′s stocks no longer mattered, it’s all a stock market index now.The FED liquidity cycle, and PPT, started after the 1987 crash.The washouts in 2000-2002 and 2007-2009 were the adjustment periods to fine tune the beast.Game on! One can fight them, or play along with them.But it is what it is.
certainly Tony…, what is it called when someone makes you an offer you can’t refuse, huh?….Orwellian stuff
It is stealth to those outside of the market
Tony, uptrend confirmations are possible in B waves. What abt in wave 2. Could we see an uptrend confirmation in a corrective (major or primary) wave 2 ??
Thanks
Mario,Trend confirmations occur in all significant waves … up or down … any pattern.They are the Elliott Waves of the market.
I think those looking for some sort of pullback might be late at this point.Already happened at yesterday close-from 1399 to 1391.1420 next.
Most, if not all, rallies start on the back of some hapless shorts, but there is a limit to the juice taken from shorts
http://online.wsj.com/article/BT-CO-20120802-714959.html
http://news.morningstar.com/all/dow-jones/us-markets/201208021114/000499/ny-fed-to-restart-repo-operations-friday-to-test-capability.aspx
NYSE short interest is at a 5 year high here however so there could be quite a bit of juice remaining. All I read is how everyone keeps shorting at every resistance point since 1363. All these guys claim to have made money the whole way as well…mmm?!
I saw that CNBC headline about NYSE short interest as well. The data that I found on both bloomberg and the NYSE contradict that claim. I have no clue where CNBC got their info.
http://www.nyse.com/press/1343126100709.html
Short interest has come down considerably. Shorts on the SPY are the lowest they have been since December 2010… and lower than it was at virtually every other interim market top since March 09.
Maybe they meant 5 MONTH high ?? Looking at your link at a minimum its been trending up since January…
True. Though be careful as that’s really only gone up through June 15th, which was still now 2 months and 130 spx points ago. I think we should assume that that downward trend after June 15 has continued with the rally since that same timeframe. At the end of the day, shorts are probably right about where they were end of April/beginning of May, which just so happens to be where the SPX level is as well!
Possibly but the July number isn’t off enough from the June to be statistically significant. The trend was still up effectively through the last report. We’ll see how the next one looks.
statistically significant? i calculated a p-value of of 0.04 from that date, so definitely statistically significant.
joking.
if we don’t get a pullback soon it looks like the hourly RSI could negate the -div in short order
Usually wait for some sort of pullback after a -div first appearsBut SOX is working its way higher.
Goldman just upgraged the SOXX … Two weeks after Tony … chalk one up for the little guy!
BTW I’m long SOXL with a 21.50 average and I’m up over 10 points in about 2 1/2 weeks … Thanks Tony!
sorry … “upgraded the SOXX.” Looks like I need to “upgrage my typing skills”
kudos OT!
Do the last few weeks look like a potential rising wedge to anybody?
Oh yes it does – and I have been watching for potential break.
I had been watching the form of a bear flag for weeks so to now morph into a rising wedge is even more interesting.
I mentioned yesterday all the negative divergences on the RSI (but that can be wiped out in a good up day) so just watching this play out.
Cheers
lots of interesting targets being met. SPX inverse H&S target was just kissed (1405.82 = 100% the move from 1267-1363); AAPL up an even $100 from the recent lows; AAPL also up 100% the wave from 566-620 (now 570-624). and of course -div on spx 60-min rsi.
all that said, the trendlines are starting to look great to me. so any pullback probably gets bought at this point is my thinking. pretty much all MAs from 34 to 200 days look bullish to me
any pullback probably gets bought at this point
Nope. No bearish divergence in the daily macd. Too many waves for a bearish wedge. From 1266 to 1380 was 5 waves. Should have dropped hard from 1380.
what is the wave limit for a bearish wedge?
RC: As far as I know it’s a 5 wave corrective pattern.
mkt feels without resistence here. straight shot to 1420′s?
a bit of a divergence here at 1404
Tony – which indicator are you referring too?
Thank you
hourly RSI
Oh yeh – same one i was looking at yesterday and we had lower S&P price – so this is really taking shape now for at least a pull back.
Thank you
unless of course we blow right through the negative divergence. naz is +115pts in 3 days. not too shabby.
Range 1,394.46 – 1,403.94, just saying.
AAPL $100+ rally, 625 another round number on the chart for Apple.
Thanks H D
Botastic !
U guys have a great day !
Going fishing on Lake Michigan …I hope I don’t hurl
Enjoy Lee!
looks like the 10-pt bots got nuthin on this bull
Do I remember 2008? Haha. I wish I didn’t as well as I do. Was working at one of the major IB’s in NYC at the time- my entire trading desk got laid off (and we were even making money!)
But yeah I hear you, and totally agree. Still has been pretty choppy up until these last couple days. Will be key if we can hold most of these gains and stay in the 70+ range on daily RSI
Some handle panic better than others.We counted the recent Ibex low as Minor 3.Plenty of room on the upside for now, Minor 1 was above 10,000.Thinking it could pop to 8,000 if the ECB does something significant.Still a bear market though, which will not likely bottom for a few years.
A buddy of mine was working at Lehman – only for about 6 months – and got canned with sweet severance 3 weeks before they went down. I still don’t know how he got so many months of pay after only working there that short period…?
guarantees most likely. he probably had a one year contract when he started, so they’d still be willing to pay him up to 6 months, maybe more
Tony, do you see five waves up on the SOX from 7/17 low? looks like 1. 345-375; 2. 375-353; 3. 353-388 (3 = 1.23x of 1); 4 388-378; 5. 378-? (currently if 394 was 5 high, then 5 = 50% of 1)
RC, yes I do.Support should be around 380 now.
Do you expect a pullback to support? Thanks.
Spain IBEX is up 13.6% from Friday morning low…
if that doesn’t qualify as impulsive i don’t know what does
RC do you remember 2008?Bear markets rallies can have huge swings in thin markets.
This is kinda cool. I am calling it the USA script, a combo my buddy Dino’s and mine TOS scripts. Red, white and blue. Shown on ES- get some!
http://flic.kr/p/cM4kHy
Thanks, Tony.
It is good to hear that you would accept a possible pullback. You know, I am still bearish. Medium and long term berish and I`ve shorted the market today in the morning. So I would love to see a correction =).
Have a question: Did SOX confirm an uptrend ?
Thanks again.
yes SOX confirmed
thanks, Tony
Hello M1, When do you think it will start bearish? It’s president’s election year, kind of hard to say for me~
Steven, was 2008 a president’s election year ?
Actually, I only follow price patterns and waves
GL
A move above 1401 should signal a continuation of the uptrend. A move below 1389 could mean a bit further to go for this correction. My best scenario has the market moving up to 1400-1401, pulling back, perhaps below today’s 1394 afternoon low, and then clearing 1401 to continue the uptrend.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/08/mondays-market-080612.html
CAC Time Ratio 123.6…
http://astrofibo.blogspot.ca/2012/08/cac-time-ratio-1236.html
SP500 Time Ratio 123.6…
http://astrofibo.blogspot.ca/2012/08/sp500-time-ratio-1236.html
Tony,
Can I think of:
Longer Term as being Months – Years
Medium Term as being Weeks – Months
Short Term as Days – Weeks?
Am I thinking correct here?
Thanks Gregg
Exactly Gregg!
Thanks!
Gracias Amigo
de nada
Thanks Tony!