SHORT TERM: new bull market high, DOW +245
Overnight the Asian markets gained 0.2%. Europe opened higher and gained 2.7%. US index futures were higher overnight, and at 8:15 the ADP index was reported higher: 201K vs 163K. Then at 8:30 ECB president Draghi announced their upcoming bond buying program: http://www.ecb.int/press/pr/date/2012/html/pr120906_1.en.html. Also at 8:30 weekly Jobless claims were reported lower: 365K vs 374K. The market gapped up at the open to SPX 1412 and continued to rally. At 10:00 ISM services were reported higher: 53.7 vs 52.6. Nearing 11:00 the SPX made a new bull market high as the rally continued. With only a 3 point pullback along the way, the market rallied into the close hitting SPX 1432 and closed there.
For the day the SPX/DOW were +1.95%, and the NDX/NAZ were +2.20%. Bonds lost 20 ticks, Crude lost 55 cents, Gold rallied $6, and the USD was lower. Medium term SPX support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow, the Payrolls reports at 8:30 along with the Unemployment rate.
US index futures advanced overnight ahead of the ECB announcement. After ECB president Draghi’s speech index futures bounced around quite a bit before the market opened. At the open the SPX gapped over the upper downtrend line of the two-week triangle, then quickly cleared resistance at 1413/16. By 11:00 the SPX cleared the next resistance area at 1422/27 and made a new bull market high. Minor wave 4 ended in a triangular formation at tuesday’s SPX 1397 low. Minor wave 5, Intermediate wave iii, is currently underway.
The first level of resistance is at the OEW 1440 pivot range. Fibonacci wave relationships suggest this pivot will be cleared before Minor wave 5/Intermediate wave iii ends. The next resistance area is at SPX 1464/65. At this level Minor wave 5 equals Minor wave 1, and Intermediate wave iii equals 1.618 Intermediate wave i. Short term support is now at SPX 1422/27 and 1413/16, with overhead resistance at the 1440 pivot and SPX 1464/65. Short term momentum is extremely overbought, suggesting a pullback soon. The short term OEW charts turned positive at the open, with the swing point now at SPX 1411. Best to your trading!
MEDIUM TERM: uptrend new highs
LONG TERM: bull market
Dow still not making new highs…
maybe they need to re-balance it with AAPLl – then it will ; )
Central Banker,
When AAPL enters the DOW, soon, the party will be almost over.
as a Central Banker, i will do my best to extend the punch bowl party into infinity…. We have ways and means, ou know : )
Thanks Tony. Have a great weekend everyone.
oops, ..should read: you know
Hi Tony,
The market looks fine and it looks like a normal consolidation day, but I guess a follow through is quite important at this point to confirm this new rally has legs. I think one or two more weeks should be needed to see things more clear.
However, the bears may use any negative event to try pushing the market lower. So, I wonder what could be the new inflection point now ? I mean a level that should not be revisited.
Thx
Mario,
Will need to think about that for a while.
But yesterday actually lowered the ‘worry’ threshold to the 1363 pivot.
Intermediate wave iv, when it occurs, has plenty of leeway at the moment.
There is a nice minor wave 4 and micro wave 4 at 1396. I guess this level should hold.
If it goes lower, then 1363 should not be overlapped, right ?, but even if we see that low we could adjust the count. We may have completed an important wave 1 up from 1267 to 1437 (170 points).
Max fib retracement for a wave 2 down : 61.2 – 78.6%…. that take us to 1303…. very interesting !!
Correct, strong support between 1396/98 has held for about a month.
Also, during this bull market 4th waves have been weaker than 2nd’s.
Recent example Minor 2 46-50 pts, Minor 4 30 points.
Since Int.ii was 54 pts, Int. iv may only be about 30-35 points again.
http://scharts.co/NZ9hjr
Noon Update Video posted…bought AAPL + Free Audio Broadcast day today
http://www.wavegenius.com/2012/09/07/elliott-wave-noon-update-for-9-07-12-grinding-sideways-but-bought-aapl-youtube/
Lee, Oil doing an interesting dive again…. “black magick” and woodoo….
Outstanding video M1
Anyone knows what’s happening with gold and silver? It’s exploding in the last 10 minutes.
I thought it would tone down today after people realized the true nature of Draghi’s move.
see our QE convo below…
after today’s weak jobs # and bernanke’s previous comment that he considered the employment situation “grave,” i wonder if the chances of QE aren’t higher than we’re giving credit
Probability of QE 3 at its highest since summer of 2010.
Does not mean it will happen, but it has increased.
gold’s getting pretty excited again that’s for sure
Euro Bonds:
EGBS: In latest MNI poll asking respondents view on whether ECB
President Mario Draghi’s new ‘Outright Monetary Transaction’ (OMT)
programme plan had the OMG factor? — most said no, as details were
already leaked. The general response was that the OMT announcement has
had the desirable effect of bringing yields lower, but the most see this
as short-term, and merely buys time. Most noted implementation risks to
the bond buying plan as well as being conditional on governments signing
up to the EFSF, and then adhering to this and implementing reforms.
“This is not a cure for the lack of growth in the eurozone”, said one
trader. Another trader said the potential terms for Spain will force it
to become “more and more like Greece”, and the risk of “ending up with a
2-tier euro system”. “It’s now down to Spain and Italy to see who blinks
first”.
Hi Magnus,
True, details were already leaked as early as last weekend.
But think about what the Central Banks around the world just gained.
True….now the really force Spain to apply for the ESM/ESFS….
All eyes, including China’s, are now on Spain.
The pendulum of worldwide economy recovery rests there.
Plus, in the process, Central Banks can now control interest rates in any country worldwide.
Credit defaults swaps are now in a sense a bet for/against the central bank.
“Never let a good crisis go to waste”
The CBs of the world now have more control than ever.
Well, the market finally broke out to the upside. It looks like we should see one more move higher, with 1446-1466 being my target.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/09/thursdays-market-090612.html
From wednesday onwards, all world market will collapse.
So it is caution for bulls. Please please please
exit your longs latest by tuesday at around 1450.
Pankaj, why are you saying this?
The Opportunity Song:
alas, in the nick of time to save me awake from a future of suicidal ennui: we surmounted the spx wall at 1420-22 that i’ve been watching with few casualties. todays’s rally was flanked by a positive adp jobs report and decent momentum.
be on guard, still, as september is notoriously filled with trap doors and unwelcome booby traps.
i am currently 20% long a small cap folio of 46 stocks and 20% long a 27 stock portfolio of all technology stocks. total commitment is 40%.
i will likely reboot tna, nugt, and uvxy folios as short term signals are triggered, each with a 10% commitment but not to exceed a 70% total commitment. i’ll take short signals in tna, nugt, and long volatility signals as hedges against longer term holdings mentioned above.
be alert to unemployment data in the morrow.
Hello
did we get a confirmation ?
DOW 17,000 Middle of next year?
http://www.wavegenius.com/2012/09/06/elliott-wave-forecast-for-9-07-12-long-term-count-for-spx-dow-nasdaq-ndx-dow-17000-next-year/
UTX has topped in 7/2011. I see mid 50′s.
(UTX can go higher, but won’t breach 7/11 high)
UTX is spending most of their FCF on paying down the GR acquisition debt in the next 6-12 months, so it would fundamentally be consistent with a lagging stock price until they begin to redirec funds to shareholder enhancement
rc1269, there are way too many smart people and people with information, which reflects in the chart. I just look at the charts. Hopefully correctly..
thanks for sharing, I3.
I am 1.08 away from being wrong on this one. The setup has changed since then.
Thanks Tony! With the Aug. Employment rpt. tomorrow and the FOMC meeting results next Wed. the next several trading sessions should be interesting/fun to watch. And trade?
Lee I’m so clueless i didn’t even pick up on any tension! thanks everyone for their posts. unless we’re talking ’bout bonds i’m generally pretty ignorant, so the more posts the merrier in my book. no hard feelings all around. let’s just make money! [with an aaron rodgers TD belt dance motion]
This Oil thing is nagging in my head. I found this rumor….”… Oil dropped hard on rumors of an imminent SPR release…” anyone seen or heard about this one? as a curiosa France have imposed “price control” on gas with an agreement with oil companies….is something brewing in the US too? election soon!?
Thanks Tony for all you do paisan !
I blame that CME for all the tension.
Much respect Tony and gang… I like u guys too much for this to get silly
natura abhorret a vacuo
Lee, I remember your post.
We’re competing against the markets, not each other.
Was kind of surprised today, with no QE program in Europe, that Crude (initially) and Gold (thru the day) rallied.
Sterilization of asset purchases does not expand the monetary base, nor increase liquidity.
Maybe these commodities just need to finish off their current uptrends. (???)
Tony, I notice both Gold and Silver are still displaying the negative daily RSI divergences I flagged up last Friday.
My market model suggests the weekly MACD should flatten off here for 2-3 weeks, before continuing upwards into mid-October.
Also the weekly and daily RSI should pull back, in order to find some balance in the time symmetry. I hope Gold will begin to produce a symmetrical pattern similar to 2008-9.
If it does, we should have some pretty good trading setups in the months ahead!
thanks Alex