SHORT TERM: consolidation day, DOW +25
Overnight the Asian markets gained 0.6%. European markets opened higher and gained 0.4%. US index futures were relatively flat overnight. The market opened 1 point higher than yesterday’s SPX 1416 close, and pushed to 1418 in the first few minutes. Then it started to drift downward. At 10:00 Consumer sentiment was reported higher: 73.6 vs 72.3, and the Leading indicators were reported higher: +0.4% vs -0.3%. Around 10:30 the market touched SPX 1415 and tried to rally. Heading into the close the SPX hit 1419 and then ended the week at 1418.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.45%. Bonds gained 4 ticks, Crude rose 55 cents, Gold added $2, 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 declined from extemely overbought. Last night the FED reported a rise in the Monetary base: $2.70 tln vs $2.69 tln, and a decline in the M1-multiplier 0.851 vs 0.864. Today the WLEI was reported nearly back to neutral: 49.4% vs 48.7%.
The market opened marginally higher today, made a new uptrend high, and then went sideways for the rest of the day until the close. This was probably the quietest options expiration friday in history: a four point range. As the market was going sideways it was working off the extreme short term overbought condition during yesterday’s rally. During the day we added seven new charts to the public charts list. DSX and YHOO stocks, plus five tracking ETFs: CAF, DDM, SMH, TBF and YCS. Enjoy!
Short term support remains at SPX 1413/15 and 1402/03, with resistance at SPX 1422 and the 1440 pivot. Short term momentum declined towards neutral today, but closed overbought. The short term OEW charts remain positive from under SPX 1370 with the swing point now around 1406. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market
CHARTS: http://stockcharts.com/public/1269446/tenpp
New email: oewtony@msn.com
Tony,
Quick Question…Weekly MACD and TRIX is forming a very strong bearish divergence along with RSI, MFI and DPO. From what I’ve seen in the past, when the weekly charts have strong divergences of this nature, a larger pullback follows. That would argue against your count. The pullback off of 5 should be much larger than 4. The 2007 high was a big weekly divergence. 2010 and 2011 as well. And all three were final 5 wave counts. Is there a 5 count out there not being considered? The divergences on the weekly charts are too much to ignore.
Val,
Actually I do not consider those divergences until there is a five wave count.
Notice 2005/06 also displayed similar divergences.
Tony,
Yes, I noticed those divergences as well but the divergences were not steep and the market had not come off of a meaningful correction. What I’ve noticed is the the steepness of the divergences matteres. When MACD and TRIX are so badly broken down relative to the last high, it suggests a more meaningful breakdown in momentum and relative strength. Also, when the market is steadily uptrending, the divergences seem to mean less. In this case, the market is coming off of a nice correction and the divergences are VERY steep.
Still think we’re okay for now
http://www.marketwatch.com/story/ecb-weighing-shift-to-euro-zone-bond-buys-report-2012-08-19
Remained long TNA from 53.30 as mentioned here a few days back. 57.70 near the close looking for 60.71 to sell remainder. 56.40 is new stop.
thanks Tony. probably slowest day of the year for me in credit land. snooze fest. weekend couldn’t come soon enough! cheers -rc
Thanks Tony! Very interesting new charts! Appreciate everything you and your group do!