SHORT TERM: market pulls backs after two day rally, DOW -171
Overnight the world’s markets continued their rebound as most of the Asian markets were up sharply. Quite a volatile week in that region: Australia was down 10% by tuesday only to close the week up 1.5%, and Hong Kong was down 14% by tuesday to close the week off just 0.3%. Europe had a roller coaster ride as well, as England ended the day flat, and the week with a slight loss. The US markets started on a positive note as the index futures were traded higher overnight. A gap up opening pushed the SPX to 1369 in the opening minutes, the level (1364) from where the bull market broke down. The higher opening was immediately met with steady selling throughout the day. By 2:00 the SPX hit 1328 which held for an hour, then rallied to 1340, only to fall back going into the close. After a 100 point rally in two days, a one day 40 point pullback doesn’t seem too unreasonable. At the close the SPX/DOW lost 1.50%, and the NDX/NAZ were 1.75% lower. Bonds rallied over one point, Crude gained $1.30, Gold added $9.00, and the Euro was sharply lower. Support for the SPX is at 1327 and then 1316, with resistance at 1344 and then 1364. Short term momentum turned lower after getting overbought this morning. After possibly a little more downside pressure monday morning, expecting this rally to resume. Best to your weekend!
MEDIUM TERM: market bottomed at 1270
LONG TERM: bearish
the ELLIOTT WAVE lives on 
Hi Peter,
Goldman has been major short the market and has been pushing this bear market for a while.
They were also major short the CDO\’s while the others continued to expand their business.
They seem to be ahead of the curve in many areas. Some have stated concern.
Overall I agree with their 30% bear market decline scenario.
Short covering rallies are what drives bear markets rallies.
cheers!
LikeLike
Hi Tony,
They showed a chart on Bloomberg TV of the percent rise of various sectors. The rise of each sector was in direct proportion to the amount of short interest. Does that remind you of anything in the past?..It gives me the creeps that there are not enough real buyers out there….In another Blmberg interview, Jan Hatzius the chief economist at Goldman Sachs who is predicting a recession (based on reduced available money at banks for lending) said he spoke to equity strategists at G Sachs and they said the best strategy is to \’short consumer stocks AND growth\’…GROWTH ! that is a big word…especially coming from a powerhouse like Goldman Sachs….Mark Hulbert recently reminded us that the 1987 crash came at a similar time of a long declining dollar….and a similar move here would be 2700 points..best regards, Peter F
LikeLike