SHORT TERM: pullback continues, DOW -115
Overnight the Asian markets gained 0.6%. Europe opened higher but closed down 0.6%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported higher: 372K vs 366K. The market opened lower at SPX 1411, two points under yesterday’s close, and continued to pullback. At 10:00 New home sales were reported higher: 272K vs 250K, and the FHFA housing index rose: +0.7% vs +0.8%. A bit past 10:00 the SPX hit 1404, below the 1407/10 level, and tried to rally. At 11:30 the SPX could only manage to hit 1409 and started to pullback again. At 1:30 with the SPX now at 1401 it tried to rally. But by 3:00 the SPX had only managed to reach 1405, then it pulled back to close at 1402.
For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.70%. Bonds gained 11 ticks, Crude dropped $1.10, Gold rallied $13, and the USD was lower. Medium term support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum is beginning to display a positive divergence. Tomorrow Durable goods orders at 8:30.
The market opened slightly lower today, then broke though the SPX 1407/10 area we have been monitoring. This decline now looks like Minor wave 3 of Intermediate wave iii completed at the new bull market high of SPX 1427, about 6 points below our OEW 1440 pivot range target. The pullback, Minor wave 4, has hit SPX 1401 for a 26 point decline thus far.
The pullbacks during this uptrend have been fairly steep: 54, 50, 51 and 37 points. Since the initial pullbacks appear to be of a base building nature, the last pullback would fit better for Minor wave 4. This suggests support in the SPX 1390′s. Since Minute wave i topped at SPX 1392 and Minute iv bottomed at 1396 this may indicate the support range. Minor 3 was nearly 100 SPX points, a 38.2% retracement would put it right into that SPX 1392/1396 range as well. Should this area fail to hold support, and the SPX drops below 1375, then the alternate DOW count becomes most probable.
Short term support is now at SPX 1402/03 and the 1386 pivot range, with resistance now at 1413/15 and 1422/27. Short term momentum is creating a positive divergence. The short term OEW charts turned negative again right after the open, and the swing point is now at SPX 1409. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market
a nice buy here
Tony
Got long TBF yesterday. Think I will hold the position for the next decade. Think of it as a covered call against muni portfolio.
Thanks
Makes sense if the numbers relate.
YoY EPS growth ( as reported ) for S&P – 2.8% in Q2CY12. Should we “believe” in “hockey sticks”.
Up she will go to 1434-1440 on wave 5 or E….
All gold dips are buys
What if Ben comes up with a dud at Jackson hole? What happens to Gold then ? ( of course if Romney’s assault on Ben makes him go all in to re-elect Obama or Israel really attacks Iran then you will laugh all the way to the bank assuming you are long Gold) …at the moment IMHO Gold is setting up for a classic short trade ..not unlike predicted by Astrofibo yesterday…while USD is doing the reverse..
GOP and the Gold standard … sure way to lose the election.
FED and QE 3 … traders have been talking about it since QE 2 ended in Jun11.
Meanwhile economy dipped in late 2011 and has been improving, under Op Twist, since then.
The ECB is likely to do something like a QE, but more likely an Op Twist of their own.
Ben is likely to talk the talk, but not walk the walk with the DOW over 13,000.
my vote is for selloff one more time down to about 1400.83, put in the right shoulder of an intraday (2 day) IHS, then we’re free to head back up higher
The toppish pattern that you were discussing in Apple day before yesterday…seems to have been fulfilled on the Dow on that day …not an expert in candlesticks I must say…
Igor says:
August 23, 2012 at 10:43 am
Talking about divergences and trendlines:
http://stocktwits.com/message/9236981
It’s traderstewie’s opinion, not mine.
Yeah, it’s a good example why pulling a trigger based only on a divergence not confirmed by price might be nerve-racking.
1399.28 is 38.2% retrace of 1354.76-1426.79
DOW and Techs have to start leading again
just noticed that! cheers
Have a great weekend. Part timer is out.
Lee, really enjoy hearing about the pits. 83 bigs. Can’t imagine. Must have been playing an X wave.
I am buying these 1390 levels in pre-market on the S&P. If we break 1390 then I would imagine I will be closing shorts. I bought some too early yesterday at 1414 as well – oops!
Having said that when this 45 day cycle comes to an end it can often justify a move back to the 35 mda. That’s more in the 1370 – 1380 range.
Alex,
Thought we would get a bt higher than 1427.
Intermediate iv could bring us back down here again.
But too early to tell.
sorry I mean if we break 1390 then I will be closing LONGS at a loss.
Fair enough. If your target is 1499 for the year on the upside then we have plenty of time to move up and down in between and lose money for plenty of traders (er….. like me – stay positive ALEX!)
Hi Tony, What do you make of the S&P currently breaking pre-market futures? I remembered you saying (I think) that once past 1400 we may not break below it again. Obviously things change but I am wondering the following therefore: if minor 4 of intermediate 3 is breaking 1400 where does that mean intermediate 4 would likely fall back to?
Lee, I’ve gotta ask – in your “$34″ target for gold yesterday was that $1634, $1734 or just… $34? Or was that not even related to gold?! Could have been your waist size for all I know. cheers!
rc – Lee doesn’t get up until 11
Turtle Trend Analysis: INDIAN NIFTY FUTURE last traded price: 5397. Current Hourly Trend: Down, Dynamic Trend SL: 5462.65. Visit http://stockmaniacs.net/blog/what-is-turtle-trading-system-download-free-amibroker-formula/
The move over the last several days fro 1426.68 to 1401.57 looks to complete a 5 wave sequence. This should be wave 4 from 1267, with wave 5 possibly taking out the 1426.68 high. Wave 4 could still meander lower, but 1395 would be the limit. A move below that would probably signal a major move to the downside.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/08/thursdays-market-082312.html
Thanks Steve. Interesting work.
thx Steve
Little off subject
http://espn.go.com/new-york/story/_/id/8298135/usada-ban-lance-armstrong-life-strip-seven-tour-de-france-titles-charges-used-performance-enhancing-drugs-cycling-career
He’s still a hero in my book. Never failed a test and does so much for cancer fighters!
LIVESTRONG
GOLD going to keep on chugging into June 2013, with obvious pullbacks along the way… buy and hold baby…
Good count you have near term Tony on SP 500 me thinks, 5th wave yet coming yes…
Did this today for the Stocktwits peeps
http://stocktwits.com/message/9243464
I called it ABCDE, this is D, next E…same thing, different labels
Cheers all
Whatever works for you
Gold seems to have hit the neckline of a potential inverse H&S here (beginning at the Feb high).
If it sells off to around $1615 and starts to form a right shoulder, then that should confirm the pattern.
Also the duration of the uptrend from the mid-May low seems to be consistent with the elongating trends I noticed from August 2011. In other words time may have run out for this uptrend, provided the ratio between subsequent trends remains at the same value it’s had for the last 12 months.
Good report Tony. Fits my thoughts well. Thanks!
ASTRO Update Reversal 21 August 2012…Decli Speed Neptune…
http://astrofibo.blogspot.ca/2012/08/astro-reversal-21-august-2012.html
AAPL 8th dimension ratio 3.14159…
GOOG Time Ratio 161.8…
http://astrofibo.blogspot.ca/2012/08/goog-time-ratio-1618.html