monday update

SHORT TERM: financials drag down market again, DOW -240
Overnight the Asian markets were mostly higher, but Europe opened lower and closed -1.05%. US index futures traded flat overnight and the market opened relatively unchanged. By 10:00 the SPX had moved up to 1260, but that was the high for the day. After that, today looked pretty much like thursday, (a gradual decline), but not as severe. At 12:00 Fred Mishkin gave his last speech as Fed governor: http://www.federalreserve.gov/newsevents/speech/mishkin20080728a.htm. It certainly looks like he was making a point about the FED setting guidelines for employment and inflation, and then ignoring them when they are inconvenient. Then at 2:30 a statement was released by FED governor Warsh: http://www.federalreserve.gov/newsevents/speech/warsh20080728a.htm. Neither comments seemed to stir the market much as it continued to decline right into the close. For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -2.20%. Bonds gained over 3/4 points, Crude added $1.45, Gold rose $4.00, and the Euro was higher too. Support for the SPX slipped to 1219 and then 1179, with resistance at 1240 and then 1261. Short term momentum is quite oversold, and the near term indicators are oversold as well. Tomorrow Case-Shiller at 9:00, then a consumer sentiment reading at 10:00.
Today the market closed at the extreme lower limit of the 1240 pivot (1234). Should the market continue lower tomorrow support is at SPX 1219, and then a potential double top scenario would still be in play with a rally to SPX 1287. There has been some suggestions that the recent rally was a wave 4 of the downtrend. This count can’t be totally ruled out, but it would be out of chartacter for the downtrends already experienced in this bear market. Best to your trading!
MEDIUM TERM: downtrend bottomed at SPX 1200
LONG TERM: bear market

About tony caldaro

Investor
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30 Responses to monday update

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  2. Mark says:

    Hi all,
     
    For what its worth, i think the banks lead the way. In my opinion this is an economic colapse in the making.
    my bank charts can be seen in my blog at http://www.greendragonroom.com
     
    Mark

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  3. tony says:

    Hi mact333, the original projection: 1287- 1240-1327.
    The pivot at 1287 should be interesting…

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  4. tony says:

    Hi Frank, the downtrends during this bear market have displayed weak 4th waves, with stronger 2nd waves.
    This was the theme during the Nov and Jan downtrends. The recent downtrend displayed a weak 2nd wave as well.
    Remember, none of the rallies from 1440 to 1200 were stronger than 36 points.  
     
    Hi Joe, Gold is about the only commodity I follow still in an uptrend.
    Crude does look lower, so Gold will remain under pressure.

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  5. mact3333 says:

    Tony, which projection do you favor at this point???…thx.
     
    1. 1287–1240–1327
     
    2. 1287–1240–1287

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  6. Chrys says:

    Wave \’a\’ ended at 1761. On the hourly I count 5 waves (ABCDE) which is wave b. The next significant move would be down for wave \’c\’.
     
    Alternatively, a more bullish count from 1761 would be \’a\’ followed by abcde and then \’c\’ up. A move above 1865 would confirm the bullish move.

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  7. Red says:

    Chrys, I agree with your triangle view.  So does that imply that NDX is going up or down for wave C?

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  8. Chrys says:

    Seems like the NDX is out of synch with SPX. NDX looks like it has just finished an ABCDE triangle which I\’m counting as B.

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  9. Frank says:

    I still think is going to be hard to best 1291 especially if we just shoot up there without any pull back or consolidation…

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  10. Frank says:

    Look like another counter trend short rally… look at the speed and size of the bounce… we are again poking on the upper side of overbought (not extreme overbought yet) again… although if there\’s going to be a mirror move then target would be around 1320… 1291-1200=91 and then add 91 to 1234 = 1325

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