SHORT TERM: market pullback continues, DOW +12
Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.6%. US index futures were lower overnight as well. At 8:30 the Q2 current Account deficit decreased: -$117.4 bln vs -$137.3 bln. The market opened at yesterday’s SPX 1458 low, dipped to 1456, and then tried to rally. At 10:00 the NAHB index was reported at its highest level in six years: 40 vs 37. Around 11:30 the rally ended at SPX 1461 and the market started to pullback. The pullback was minor, in this quiet trading day, as the SPX hit 1457 by 2:00. Then the market just drifted up to end the day at SPX 1459.
For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds gained 8 ticks, Crude dropped $1.10, Gold gained $13, and the USD was higher. Medium term support remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: Housing starts and Building permits at 8:30, then Existing home sales at 10:00.
The market opened lower today, hit a new pullback low at SPX 1456, then traded in a narrow range for the rest of the day. This pullback has now extended to 19 SPX points (1475-1456), but it held the 1463/64 pivot support today at 1456. Thus far, the past three days look like a consolidation period after new bull market highs. Nevertheless, we continue to monitor the fibonacci 1463/64 pivot range, (1456-1471), to determine the markets next short term move. Keep in mind, any futher pullback will probably find support at the 1440 pivot. And, any breakout will encounter resistance at the 1499 pivot.
Short term support remains at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum touched oversold again today then bounced to neutral. The short term OEW charts remain positive from SPX 1412, with the swing point now around 1448. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market
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Thanks Tony and gang for Listening to my ramblings.
Hey Vorhart
Ur thinking is fine
who,us, listening to you Lee?…
like that little bridesmaid at the royal wedding last year..maybe? 
I know we’re all watching RSI 5 here, but since lots of folks follow RSI 14, here’s another look at that break-out…if we stay above 1461.44 on a closing basis today, we’re good imho (I should obviously not make ANY comments about RSI after yesterday, but c’mon this one is factual) http://screencast.com/t/kUDvJs6k
well the other one was factual too – but the BOJ got in the way in the way..
rsi(14) at 70ish … at that level…
Hey C B hahaha I know what ur talking about.. NIce !!!
I know nobody listens to my babbling ..Its all about the videos
haa..yeah j/k Lee – of course we’re listening to you – ualways keep us on the edge of our seats …and yes those videos…like that Turtleman guy U posted some time ago…he said he was “always looking for bubbles” – and I thought, h,,, he’s the best damn fader you can find(after Lee, of course),,.so yes, we need (sorry, we demand
) more videos Lee. ..
dang,pretty close to rsi 70 -but it held, it seems
Alright how about I’ll stop thinking altogether. Only gets my in trouble anyways
well at least ZC popped… pun intended
)
ES 1451 still holding after the mother n law fade (thats for u C B
And CL is trading like the poles reversed ahead of Dec 22 2012
haaa!!..ur such a tease Lee!..hey ur Mother n law is starting to develop quite a reputation here….pole reversal…LOL..that’s so funny!!
)
Hey C B !
What can’t be CL doing here as far as a wave count goes ? Tony or anyone
Nice job THD !
Thanks
Im getting bullish here…oh man
not getting long until I can get a set up….back to Aug 6 crime scene.
Ill miss the 1 st move up if theres one coming soon
Lee … tidbit for you.
Today [Nov 3rd 2010] the Fed pledged to purchase $600 billion in Treasury securities by the end of the second quarter of 2011.
Crude then rallied to $88.63 over the next few days.
Then suddenly dropped to $80.28 over the next 8 trading days into a Nov 23rd low.
Probably an options expiration that time as well.
10% drop in three day
2 before 3 or 4 before 5 in SPX DOW NASDAQ?
http://www.wavegenius.com/2012/09/19/elliott-wave-noon-update-video-for-9-19-12-2-before-3-or-4-before-5-youtube/
Tony ur S2 94.14 CL pivots were in line I quoted whack pivots( Oct contract) . I was incorrect
Slight pos div at recent low on my 2201 and 8802 Vol charts The best CL trader I know is trading Gold today because he doesn’t trust any move up or down.
Looks options related … crazy Bots game
Truly crazy…92.56 CLX is what I’m watching now to get a pop…i
Tim Seymour @timseymour
Gas Futs -10% off the top along with the 7% move in oil. You get the sense that the Fed knows you cant lower rates but raise cost of living
what did I do wrong with that post ? dang
GL guys !
The latest QE is aimed at mortgage securities and not as much Treasuries. A stronger economy will push yields higher along with higher stock prices.
Thanks Tommy
Lee CL futures expire tomorrow?
Have seen this drama played out in the metals many times over the years.
Tommy,
Agree, and rising commodity prices, sparing today, too.
Tony
Yes sir they are… I’m always aware of the expiration but this still came like a thief.
U have to use stops in CL IMO
Inv# @9:30 CT…CL
I am not long CL so see what happens
2 mil rise..Duke & Duke must of talked to Beaks !
Have a gooden guys
on a 4 hour chart the move from 9/14 high to 8/2 low Globex all hours..92.27 ish is .618 back CL….
Morning Tony,
With crude’s current move is it still within the tolerance of the count you mentioned Monday? at least i think it was monday… thanks!
GM RC,
Yes, but it better start rallying soon.
hah i hear ya. thanks sir! and a happy wednesday to you
for a post, in credit land the appetite for bonds is nigh insatiable. new issues getting gobbled up like mad because you can’t pull out paper in secondary. deals like Kohls (Kohls!!) talked at 300mm “will not grow” +180bp… ends up coming $350mm (upsized) at +145bp. yes, Kohls! nuts. money is flowing.
in general, i would say the love of UST is waining. everyone wants spread product (corps, mtgs, abs, cmbs) because when tsy yields start rising that spread will be the only thing to cushion the blow. check out TIPS breakevens and the how the curve has steepened – inflation is coming to a 30yr bond near you. the short end should stay pegged low for a while and accounts will continue to feast on the belly of the curve (5-10yr), where you still get a little juice and a nice roll-down. the long bond… good luck. that’s all i got maestro. cheers
thanks RC … sounds like debt is following the script
There has been a decent fear premium in Crude for sometime. This should – may already be – abate soon. Could be a 10-20% premium that could dissipate. Not too bullish here imho & fwiw…
for avoidance of doubt, i’m shorting the long bond on every rally from here on out. pick your flavor, SHV, TBF, TBT, futures… but i think we’ve put in the lows on the long rates.
$92.70 CL is support #
thanks Lee – sitting right there
Hey R C
$95 being lost this morning gave em the ball.
Nice to see CL being discussed here
Thanks for the credit report !
Look at ES hahaha
expiration tomorrow for CLV…
These guys are good !
92.70 lost too it seems. was that S2? is there an S3 or is that the gutter. hah
S2 was $94.14 … right Lee?
Here’ my pivots
S2 93.83 S1 94.66
S3 91.71 PP 95.95
cool beans, thx master of all things crude. btw forgot to mention – love the SNF avatar!
Hey R C
Haaa Thanks ! That avatar was inspired by Tony
Looks like CL got a lot of folks attn this week
http://i.imgur.com/vN8ia.gif
Good morning,
When banknotes (often known as a bill, paper money or simply a note) were first introduced, they were, in effect, a promise to pay the bearer in coins.
The idea of a using durable light-weight substance as evidence of a promise to pay a bearer on demand originated in China during the Han Dynasty in 118 BC, and was made of leather. However the first known banknote was first developed in China during the Tang and Song dynasties, starting in the 7th century. Its roots were in merchant receipts of deposit during the Tang Dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions. During the Yuan Dynasty, banknotes were adopted by the Mongol Empire. In Europe, the concept of banknotes was first introduced during the 13th century, with proper banknotes appearing in the 17th century.
Mario you are correct,
In Europe receipts of deposit was first introduced by the Knights Templar.
Which later became the Knights Hospitalers.
And still later the Money Changers, or European bankers.
The roots of the world’s banking dynasties today can probably be traced by to just nine men.
The original Knights Templar.
It is not so clear why coins were invented. There are several theories. I like the one that suggested that it was as substitutes for barter. In other words it was worth something.
Then, I conclude paper money should worth something, right ?.
If we have more things we should have more papermoney. If not, we shouldn’t. Otherwise, we will need more paper money to buy the same thing. Let’s say one share of any company. Sounds familiar ?
On the other hand, papermoney can not be worth land. We will never have more land. There is abt 148,940,000.0 square km of land around the world and that’s it. So if we start buying land its price will skyrocket. Sounds familiar ?
Fortunately, we can produce more and more food for the moment. Think what could happen the day we can not.
Someone has to stop the central banks printing machines.
have a good day
I am still looking for the market to move higher to 1497. If the market breaks through 1456, 1448-1444 would be the first support level, followed by 1426.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/09/tuesdays-market-091812.html
thx Steve
SCO, the short oil fund, looks like a buy if it trades and holds above Monday’s high. I don’t have any fancy indicators to support the view. But I’m telling you, if you stand on one leg, squint through one eye, and tilt your head just so, crude oil looks like a short down to the mid- to high 60′s.
I’m still long my SOXL, though I did not like the action on Friday, and if this pullback were to get more than a head of steam to it, I might jettison the SOXL, and buy it back on new highs or a high volume up day.
Thanks for listening … and Thanks to you Tony for your excellent insight and analysis and for providing a forum were lone wolf rejects like me can sound off as though I actually know what I am doing and flatter myself that someone else may actually be listening (even if they are laughing at me at the same time)!
Thx THD,
Opinions make markets.
Still holding SOX here as well.
Read an interesting article today re: the end of the petrodollar. It all began 39 yrs ago when President Nixon brokered a deal with King Faisal of Saudi Arabia to accept US dollars and only US dollars as payment for oil vs a basket of currencies including the dollar, gold, yen, French franc, British pound and German mark. This was done based on a pledge to to protect the Saudi Monarchy and all it’s oil fields. The petrodollar may be under siege. Starting in December of this year the Iranians will officially launch the Iran Oil Bourse, and will offer oil on the open market for the first time in currencies other than the US dollar. If this works other governments won’t have to hoard dollars to purchase oil. The dollar will continue to drop and the biggest effect I believe will to dramatically push up interest rates on the US Treasury market. Tony this might be the unattended consequence for your forecast of the end of the longest running bull market in bonds. Continue to purchase TBF.
thanks Aqua,
China has been playing a similar game for a few years now.
Thanks, Tony. My work, is a bit more negative leaning than yours, but do like the 1440
support level. In running a Bressert Double Stochastic program, the negative
divergence pattern of the 14th, and crest. I still see, a decline mode. If your right,
we should get oversold by Thursday, to produce a low, that your work seeks.
Watching the CAF trade, very closely via Shanghai (000001.SS) via Yahoo. Looking
like one more low, is coming forth…..Bud
thanks Bud!
http://www.mptrader.com/middayminute/ just in case you guys dont have that link yet – crude oil
“Get to work Mr. Chairman”
Oh wait…he already did.
Since everyone’s deep asleep here I thought I’d ask a question about crude again – Lee et al. mentioned $130. But if 5 = 1 I can currently only see $105 only before the next deeper correction. Or is that stoopid thinkin’? – thanks.