SHORT TERM: market gaps up again, DOW +188
Last night the FED reported an increase in the monetary base: $2.94 tln vs $2.65 tln, and an increase in the M1 multiplier to 0.868. Overnight the Asian markets gained 1.5%. Europe opened higher and gained 1.7%. At 8:30 Q2 GDP was reported lower: +1.5% vs +1.9%, but beat lowered +1.2% expectations. The market gapped up at the open to SPX 1365 and continued to rally. At 10:00 Consumer sentiment was reported higher: 72.3 vs 72.0. At 12:00 the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20120727a.htm. The market continued to rally, with only one 3 point pullback, to SPX 1388 by 1:30. Then with the market extremely overbought it started to pullback. At 2:30 the SPX hit 1383, then rallied to 1389 by 3:30. A pullback into the closed ended the week at SPX 1386.
For the day the SPX/DOW were +1.70%, and the NDX/NAZ were +2.30%. Bonds lost 27 ticks, Crude gained 75 cents, Gold added $10, and the USD was lower. Medium term support for the SPX jumps to the 1372 and 1363 pivots, with resistance now at the 1386 and 1440 pivots. Today the WLEI was reported higher again: 48.4% vs 48.1%.
The market gapped up this morning and just kept on going. ECB president Draghi’s bullish EUR comments were apparently the catalyst the market was awaiting. Early in the day the DOW crossed 13,000, a new uptrend high, then the SPX crossed its uptrend high at 1380. The 2-year cycle low in Techs appears to be behind us as well. The SOX index is getting close to confirming an uptrend. Once this occurs, Techs should lead for the rest of this uptrend. We added FB and SBUX to the public charts today. No, we still do not like FB. We’ll update everything in the weekend update. Best to yours!
MEDIUM TERM: choppy uptrend makes new highs
LONG TERM: bull market
the ELLIOTT WAVE lives on 
Today’s rise to 1389 satisfies my model for the termination of a 5 wave sequence from 1309.27, and what I believe is wave 3 from 1266.74. If the corrective wave 4 ends between current levels, and 1368, 1497 would be my next target. If the correction extends to between 1350, and 1330, 1426 would be the target. There is also a slight possibility that 1389 completes a 5 wave sequence from 1267.
Thanks,
Steve
http://5wavemodel.blogspot.com/2012/07/fridays-market-072712.html
LikeLike
monday’s roadmap for anyone interested:
http://standardpoor.wordpress.com
LikeLike
thanks Tony. We extended 100% from the most recent 1325-1380-1329 at 1384, so I can’t think of anything else to do here but get a bit short for Mon-tues …so we’ll prbly get to to the 1393 that Steve has mentioned first.
LikeLike
if we indeed open lower then either 1377-78 holds & we go up again ,or we’re headed to that rising 60 TL supp, imho. http://screencast.com/t/xvDcfDJC
LikeLike
Thanks CB, but I think I may have missed it by 4 points.
Steve
LikeLike
Nice job, Steve. When you get it right directionally & you capture nearly the entire move, 4pts is really pretty negligible isn’t it? 🙂 …and the main reason for that slight “miss” could have been the fact that hitting the widely anticipatred 1390ish target or exceeding it would have prbly. triggered a much stronger profit-taking EOD, so the powers that be decided to finish the session in a more “interesting” way and possibly leave the door open for an opening gap up…so what you call “missing by 4pts” was really meeting the target with some necessary deviation. Thanks very much for sharing ur excellent work with us, Steve.
LikeLike
Thanks Tony for all your sharing.
My words for tonight goes to the UK. What a G8 opening of the Olympic games. Thank you UK!
LikeLike
SPX Trend High is 1422.38
SPX Trend Low is 1266.74, which equals a sell-off of 155.64 pts
.786 retracement = 122.36
If we take the SPX low of 1266.74 and add the 122.36, we magically get 1389.10, which is 9 cents off of today’s high at 1389.19.
Bear trap or golden opportunity to sell longs and/or hedge through the end of Q3???
Feedback?
LikeLike
Correct. Those are the numbers.
You should have the answer to your question next week.
GL
LikeLike
Thanks M1. All hail the bots!!!
LikeLike
WaveRookie: Here’s a more readable version of Tony’s weekly chart.
I think the Chicago Bulls are going to clobber the Chicago Bears for a while.
http://scharts.co/QPQi0a
LikeLike
Thanks Rob! Training camp just kicked off so I think the ball is in the Bears court for awhile. Time to take profits and use towards college Football and NFL betting. GL!
LikeLike
Thank’s WaveRookie
Are you sure you want to bet against the weekly macd not going bullish next week with 13 and 34 weekly ema’s in a bullish setup?
GL to you. Hint the trading channel generated from the last 3 daily pivots slopes up!
Bulls will clobber the Bears.
Nothing wrong with being bearish. But, why are you bearish?
LikeLike
LikeLike
Thanks, Tony.
LikeLike
Thanks Tony!
I guess there is no way that 1267-1263 could have been int A of Major 2, with all the chop in between a wave B, and the last two days part of int C?
I’m long $SOX and flat everything else …
LikeLike
That’s how I see it too. Only my B triangle idea died today and here comes the B complex correction theory 🙂
LikeLike
will check for that
LikeLike
Couldn’t resist to short into this craze. Candle’s look bearish. Hitting some very strong resistance.
Closed out several long positions at a decent profit and put in buy orders above support again.
This trading range has been so good. I wonder if it will stop next week.
LikeLike
http://theincrementaltrader.blogspot.it/2012/07/es-27-july-2012-closing-re-cap.html
Today I could trade 2 interesting short set-ups.
The first, @1362.25, was discussed in the previous post.
The second, @1384.25, had its roots in the anchor points dating back to 19/06 and 25/06 (see chart above).
LikeLike