SHORT TERM: quiet opening, DOW +45
Last night FED chair Yellen gave a speech in Washington, DC: http://www.federalreserve.gov/newsevents/speech/yellen20140515a.htm. Asian markets ended 0.2% lower. European markets opened higher but lost 0.4%. US index futures were lower overnight. At 8:30 Housing starts were reported higher: 1072k v 946k, and Building permits were reported higher: 1080k v 990k. The market opened unchanged at SPX 1871, ticked up to 1872, then pulled back to 1865 by 10:30. At 10am Consumer sentiment was reported lower: 81.8 v 84.1. After a rally to SPX 1873 by 11:30, the market pulled back to 1868 by 1pm, then it started to rally. Heading into the close the SPX hit 1878 and closed there.
For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.55%. Bonds lost 7 ticks, Crude added 55 cents, Gold slipped $3, and the USD was flat. Last night the FED reported a rise in the Monetary base: $3.928tn v $3.927tn. Today the WLEI was reported at nearly a one year high: 54.9% v 54.5%.
The market opened flat this morning, dipped down to SPX 1865 in the first hour, then turned Options expiration into a positive day. Today the market held above yesterday’s extremely oversold SPX 1862 low. Then took out yesterday’s rebound high at 1872. Thus far, the market has held the SPX 1860 and 1851 levels noted yesterday. While a test of SPX 1860 is still possible, it would certainly create a positive RSI divergence on the hourly chart. Possibly setting the market up for a more sustainable rally. An interesting sector/index relationship will be offered in the weekend update.
Short term support remains at the 1869 pivot and SPX 1860, with resistance at the 1901 and 1929 pivots. Short term momentum hit overbought after yesterday’s very extreme oversold level. The short term OEW charts turned positive today with the reversal level now at SPX 1873. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market
the ELLIOTT WAVE lives on 
Here is SPX path. It should not make new high. Your stop loss should be 1913. This is to take care of GS/JPM gangsters. Latest news is JPM is turning a good boy.
Every five point rise should be sold at increasing level. For example, if you sell 5000 dollars worth spx at 1880 then, at 1885 you should sell 10000 dollars worth.
I am likley to revise final downward target to further south.
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I noticed that $SPX closed lower last week by 1 point. Also closed lower by 1 point this week. Do you think the big boys are trying to fool us? Surely not. I think we see 1750+/- in June. After all, they need to buy it lower before end of quarter so they can run it up and make some $$$.
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Correction: Last week closed 3 points lower than the week before. This week was only .62 point lower than last week. LOL
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FWIW I see this move up Friday as a ‘b of c of ii of 3’. Regardless of what Monday brings (I think a lower high to finish the b) I think we’ll be down into the 22nd where there is a turn date. That should mark the bottom of the ‘c of c’ and complete ‘ii of 3’.
We should then be rallying in a ‘iii of 3’. This clearly chimes with what Tony is expecting so I shall be looking for the positive divergence around 22-23rd and a re-test of 1860 area. Then a push up into mid-July where I currently await a top for the S&P.
I am just as interested to see if we have a major bottom in the USD. So far I believe we do. I have interest in short EUR/USD, GBP/USD, EUR/CAD, AUD/USD and GBP/JPY.
For now I am still playing the S&P from the long side.
A good weekend to you all.
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Good post, Alex, hope you start posting more regularly as before.
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Thank you. We’ll see how it goes but am relatively confident this is the right road map for now.
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thx Alex
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We have an end of day POP from OPEX manipulation and the majority say it’s now ripe for a breakout to the upside? Again from a purely price performance, 1900 is a brick wall. It couldn’t breakout all year long and now it will? during the worst months to invest in? Seriously folks look into the odds of this. It is very very very rare for this to happen. After October 2015, well that’s another story.
Now if the index’s go sideways until the end of June, then a massive breakout (upside) will happen during the months of July and August. Again that would be very very rare. However I’m open to the possibility. This could be a 1998 situation here. Very low probability here though. I suspect fund managers are going to unload their losers off their books by the end of June. Doing this will create a vacuum in the market.
Take care…
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Kevin….in response to your post about feeling like you are being ganged up on. As Tony would say “Welcome to the Halloween Party”.
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How many of you noticed the bearish island reversal pattern on $SPY’s daily chart?
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16golfer-lol so true
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thx Kevin
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