SHORT TERM: market pullback continues, DOW -101
Overnight the Asian markets gained 0.1%. European markets opened higher and gained 0.4%. US index futures were higher overnight, and at 9:00 Case-Shiller housing prices were reported higher: +1.2% vs +0.5%. The market opened higher at SPX 1461, then dipped to 1459 by 10:00. At ten Consumer confidence was reported higher: 70.3 vs 60.6, and the FHFA housing index gained again: +0.2% vs +0.7%. The market then rallied to its high for the day at SPX 1463 and began to pullback. The pullback continued throughout the afternoon and right into the close. The SPX ended the day at 1442.
For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.35%. Bonds gained 10 ticks, Crude slid 85 cents, Gold slipped $3, and the USD was flat. Medium term support remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: New home sales at 10:00.
The market opened higher today, hit resistance at SPX 1463, and then began to pullback. Around 3:00 the SPX broke through the temporary support at 1450/52, continued lower, and hit the 1440 pivot range by the close. That potential triangle scenario, noted yesterday, no longer looks to be in play.
Another look at the short term charts displays a three wave decline to SPX 1450, a rally to 1467, then another three wave decline to 1442. Both declines are exactly 25 points, for a total Intermediate wave iv decline of 33 points. The daily RSI ended slightly oversold today too. This pullback now meets our original minimum projections of a 30+ point pullback, and an oversold daily RSI. Should the OEW 1440 pivot range hold, (SPX 1433-1447), the bottom may be in for Int. wave iv.
Short term support is at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum ended the day quite oversold. The short term OEW charts now have a negative bias from SPX 1455. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market
Pingback: AAPL: Trading Cycle | Wall Street Stocks
http://screencast.com/t/0ve4xApr2 we need one more wave down…??
pivot time
Magic hour
thats all I got..If I got a nickle for every post today Id be a rich man…Ill down shift
I’d pay a nickle but not per post..only per yourtube video..but ever since I said we liked ur videos Lee all videos for the rest of the year have been cancelled..lol..so….
love cryptic…keeps our brain waves active…” thanks Lee!
this is my quote for today: “if u think u understand Alan Greenspan, then U don’t understan Alan Greenspan” (obvioulsy)
Tony,
Do you see the market rebounding from here for end of month/quarter window dressing?
Q2 GDP tomorrow morning.
Corrective W4 targets for DOW SPX NASDAQ NDX
http://www.wavegenius.com/2012/09/26/elliott-wave-noon-update-video-for-9-26-12-clearly-defined-corrective-4s-downside-targets-youtube/
Tony, this doesn’t look like the wave ii on the SOX. Any adjust in progress ?
Mario,
Fairly steep decline, but still quite normal.
Look at the previous downtrends off a cycle low.
http://stockcharts.com/h-sc/ui?s=$SOX&p=W&st=2002-10-01&id=p54372301835&a=67200082&listNum=11
My thinking is that with all the liquidity in the system we’re going to see sharper moves higher followed by relative steeper declines all the way up…FWIW! Increased volatility in BOTH directions may be the “new normal” for the foreseeable future.
Thanks Tony…
Thanks. So SOX will stay above 355/360. That’s ok with me.
This is a great opportunity
DONT OVER THINK !
The bots just kicked the bums out
Especially GC !
Lee we don’t usually get such unreserved, non-cryptic opinions from you – I like it! thx my man
Hey R C
Did we quit when the Germans bombed Pearl Harbor ? I didn’t think so
I’m just fired up with the volatilty.
If folks who position trade liked the markets 2 weeks ago they have to love them here or about about 1-2% lower right ? ES GC CL
I’m wrong as much or more than the next feller but if u get ur price thats.618 of the battle
Remember I’m a hack day trader
Hey RC
I also think Tony’s 60 min SPX chart and count is a MUST watch
BTW a correction 9/13 was the QE3 infinity ..the year high was 9/14
this week weve been getting momentum around 12:00 pm CT
Trade well !
Lee,
What do you think of wheat here?
Looks like its built a nice base the last two months and the December contract is sitting on the 13 weekly EMA.
Any big events in the grain markets coming up that I’m missing here?
Hey mm4398
I personally have not been trading ZW at all but I have been trading ZC and I got stopped out on a long position early this am that I’ve had on for a week so…
I follow this gentleman on Twitter https://twitter.com/ArlanFF101 and he and his stream of farmers and grain traders do a really good job with announcing the events big and small with wheat. It sure does look like a good base ..I saw this chart posted today and it looks tricky enough to perhaps play out. http://twitpic.com/ay7hdq/full.
I’m bullish LT to a fault
I hate the word line in the sand but 1427.50 ESZ is where guys are buying against this morning
thx Lee
U bet Tony
A little volatility and liquidity is a good thing IMO
WASHINGTON (MarketWatch) — Sales of newly built homes in the U.S. fell slightly in August as prices rose a record 11.2%, but demand remained at a two-year high.
Too much good news
I’m sure it’ll be revised and I would guess it’s higher end stuff but who knows
thar she blows CL ..all sell stops
ESZ the same…
the book has been wiped clean
Its a new day trade well !
rising prices on lower volume with stocks no problem with housing potential problem.
XHB these guys made a killing this year… Cramer walked away from housing last year and missed the whole move..In his charitable trust of course . Retail has the baton now IMO
Everything is in black and white now as far as the 60 min SPX goes.
If possible remember to hug ur mother n law at least once this year
There is an amazing thing about cycles
not that they happen and find their rhythm and give one a great tool to assess some probability. Yes, they are all true but I find them common place and not at all amazing
What is, to me amazing about cycles, is how emotions get better of most going into a cyclical low or cyclical high
we expressed probability of market sputtering in September and moving into an intermediate as well as a trading cycle low into October
how many stay objective enough to assess probability of a long entry (and associated risk if one is wrong) with regards to support levels?
mass psychology rides the cycles
and like a ship it takes time to turn
scalp em !
Some thoughts on Spain, for those interested:
Moody’s is slated to conclude their review by the end of this month. Spain is rated Baa3 and there’s a good chance they will be downgraded to junk. A move to junk rating would force Spanish banks who have pledged Spanish gov’t bonds as collateral for ECB repo to replace them. Given the scale, this would be pretty much impossible. The ECB has stated they will waive the investment grade rating requirement on collateral if the country in question has joined the ESM program. In short, if we see a downgrade to junk by Moody’s it nearly guarantees that Spain will request aid and join the program. Not doing so would leave the Spanish banking system in an untenable situation. cheers, -rc
thanks RC!
I see no problem at all…ECB & FED are in charge of this mess. So I am quite sure they will find the way how to fix that or any financial problem.
=)
There ya go Mario !
It’s all about confidence
Lee, The bears will need more than a single financial problem to turn this market south. As I have been saying. They will need a black swan event.
Very short term: correction mode since yesterday. Now, let´s see how far it goes. But I am not so confident it is over yet. This has been my preffered count since last week.
http://scharts.co/O3NFby
However, I am watching the tech sector. I mentioned you yesterday.
In my opinion, a larger than 5-6% pullback will be very concerning
GL
Hey Mario,
What bears ?
Where’s the count on that chart ?
Thx man
=)
Thanks RC
1431.25 # reaction low on 9/14 QE3 infinity taken out marginally…S1 @ 1429.00
CL S1 @ 89.87
party on Wayne
thanks Lee. I just sold my puts from ~1465 or so. i’m not good at being really greedy. now the market is free to really accelerate down!
R C
That’s a nice trade in my world !
Tony, on Crude are you still looking for it to start a new up-wave here/soon? I apologize if this was something you covered the last two days. I’m afraid the count on your charts isn’t very clear to me, with all the a’s and b’s. I recall last week you had said something to the effect of “it better bounce soon,” which of course it hasn’t. thanks again!
RC,
The last time the FED announced a QE program, Crude dropped $10 but did not confirm a downtrend.
Then resumed its uptrend.
Tough call here however.
Tony
Has Crude confirmed a down trend today ?
were just about .50% back from year low to 9/14 high @ 8950 ish
No, but getting close
Tony, just so as I understand it right, you are looking for major wave III to conclude by year end and nor the primary III. Or Intermediate V will last into the year end.
Major wave 3 in Q4 yes.
Some curve and line studies
http://markettime.blogspot.ca/2012/09/s-500-september-25-2012.html
Looks like I missed the move down today. I agree with Tony; this may be the end of move lower. A move above 1448 would confirm that. Good work as always Tony. Thanks.
Steve
http://5wavemodel.blogspot.com/2012/09/tuesdays-market-092512.html
Remember the proposed bullish count 1,2, I, II …is actually overlapping waves that can be counted as corrective & the SP500 impulse failed in May 2012. Insiders and hedge funds have been selling to underweight while retail investors now have reversed to inflows into mutual funds. Past studies of the risk on, ‘don’t fight the Fed’ trade, show that this risk on trade fails going into recessions. See Business Insider and Sy Harding for stats on global slowdown. Also it is hard to imagine an EU solution, Iran solution, Japan solution & fiscal cliff & long term US budget solution and other countries’ austerities that supports this 3rd of 3rd wave time frame implied by Tony’s Elliott wave
Couldn’t agree more but the usual answer I get against this reasoning is that the market is the greatest discounting mechanism that exists ! Add to that the huge liquidity provided by all the CB’s around the world and you have the perfect recipe for a bullish wave count that has proven correct apparently against all odds.
It’s hard to deny Tony’s ability to decipher this market using a very bullish wave count even if it is puzzling. Frankly I still can’t decide if it’s pure luck, magic or simply amazing skill but the undisputable fact is that he has been right and as a bear I have been wrong.
The only caveat I see is the little time he has left in his count (mid 2013) to fit the end of Primary III, Primary IV and Primary V. It seems very very tight.
Hi Erka11,
Tony tends to be bullish. Not sure if that makes him uncannily correct. but is a refreshing counter view to Bob Prechter’s group which seem to be bearish most of the time. Call options cost more than puts because the market rises more days than it falls. But the days that the mkt falls, it can fall a lot.
To anyone:
I need some help with this chart.
http://scharts.co/PXKWgA
I don´t have any experience on this type of pattern, so any suggestion will be highly appreciated.
Thanks
hey Tony, thanks for the update. I’ve been out a few days and already feel behind. what’s your lower threshold for maintaining your current count – that this is an Int IV? would it be about 1427? just trying to bracket things. appreciate the help, and namaste to you as well my friend.
-rc
RC,
Since we had an extended Int. iii, Int. iv has a lot of leeway.
Concern would be reached if we hit SPX 1413/16 support.
Because the uptrend count would likely fail if we then hit SPX 1402/03.
cheers!
cool beans. thank you sir for your input, as always
Tony Earlier you noted 1450 as an important level. If we can not close above this level on week, are you looking for a bigger decline ahead?
After the initial decline the market stopped at 1450 correct.
But apparently it was only short term support.
The more important level is the 1440 pivot.
The next pivot is not until 1386.
http://screencast.com/t/7UcwGFt1pz
Hm 3 waves and another 3 waves. Isn’t this what Prechter-ites call W-X-Y ?
Anyways, today was a bit scary for longs. If tomorrow is another down day, I think we might have a short term trend change.
RE: Wave Genius
Reporting 80% plus success on trades. Very nice record on posted trades. Need to look below the radar and see how much capital is committed to each position. Risk vs reward a little scewed. Ex. Risk $ 290,000 on AAPL to earn $6400 vs OEW position in S&P $17,000+. Go figure
did you even look at some of the big TQQQ and UPRO trades? Up to 8%-10% per trade..with AAPL I’d take 2.4% on a trade all day long…I hit singles and doubles like a baseball player and eventually hit the home runs…
Thank you, Tony. And love your analysis on the commodities. Live well and prosper.
namaste
Hey C B RE:”amazing how that worked this year!…if I remember correctly you hinted at that Lee. Nice ! ”
It was Tony !
He talked about the pullback with CL after the QE2 2010 and the 10% correction that followed which at todays low we’re there $100.75 – 90.57
And how the SPX corrected 4% from it’s high then also so LOL wheres that I can only do even numbers
Thanks Tony
Bots have good memories
They sure do ! Bless their cold soulless silicon hearts
on a good day, they can be soulful too
https://www.youtube.com/watch?v=X1jsU1lBZMc
Thanks Tony.
Def. Lee, Tony nailed it with great precision – what I meant is you said something in a foreign language at the right time – so, cryptically speaking, you brought it up real-time and just in time.
)
Hey C B
Nice !
It seems bot drum technology is a little behind the exchange algos but not much
Thanks
lol, right!, those dang algos….they want our money AND our souls…
fwiw, if I recall one of A. Elder’s rules correctly, he stated that when during the most recent rally BBs are exceeded and the price stays above them even briefly, then the middle line is most likely going to be support on the next pullback – today it’s @ 1436.48..so all eyes are on Tony’s 1440 pivot.
http://accessories.dell.com/sna/category.aspx?c=ca&category_id=6597&cs=CADHS1&l=en&s=dhs&ST=ram%20prices&dgc=ST&cid=3852&lid=433798
Does that mean you like DELL?
and
http://www.tigerdirect.ca/applications/category/category_tlc.asp?CatId=4147&name=Internal%20Solid%20State
doesn’t take much to overpower the minion million of the retail
No!
just an example of memory and fast storage prices available so cheaply for individual use
It’s not difficult to set up powerful number crunchers with even inexpensive stuff, now, imagine what they can do when they use industry-strength storage devices and memory banks, not to mention trading data that is available to their machines