SHORT TERM: gap down decline, DOW -264
Overnight the Asian markets lost 0.1%. Europe opened higher but lost 1.3%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported higher: 293k v 280k, and Durable goods orders tumbled: -18.2% v +22.6%. The market gapped down at the open to SPX 1991 and continued to decline. The SPX had closed at 1998 yesterday. By 10:30 the SPX hit 1970, taking out yesterday’s 1979 low. After a bounce to SPX 1976 by 11:30, the market dipped to 1968 by 12:30, then bounced to 1973 by 1:30. After that the market hit SPX 1967 by 2:00, then started to rally. The rally topped out at exactly 1973 by 3:30, then the market declined to its lowest level of the day and closed there: SPX 1966.
For the day the SPX/DOW were -1.60%, and the NDX/NAZ were -2.05%. Bonds gained 16 ticks, Crude slipped 25 cents, Gold added $4, and the USD was higher. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: Q2 GDP (est. +4.6%) at 8:30, then Consumer sentiment at 10am.
The market gapped down at the open for the second time this week. While Tuesday’s gap down was closed in the first hour of trading, this one was not. In fact, by the first hour of trading today the SPX dropped below the important support level at 1979. Then for the rest of the day traded within the OEW 1973 pivot range (1966-1980). We noted yesterday that this level and pivot appear to be quite important: “The key level to watch now is SPX 1979 and the OEW 1973 pivot range. If the market heads back to that level and breaks that pivot, probabilities increase that Primary IV is underway.” We will now add two more parameters to the potential Primary IV scenario: 1. a break of the OEW 1956 pivot, and 2. a downtrend confirmation.
The 1956 pivot is important because the rising support trend line for nearly all of Primary III is currently at that pivot. A break of that trend line would be another negative. A downtrend confirmation is important because we do not see any other counts, but a Primary IV underway, should we get one in the 19xx’s area. Since the market lost 23% during the five month Primary II, we would expect a similar decline but likely lasting only 2-3 months. We are certainly at an interesting juncture in this bull market. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 2000. Short term momentum is displaying a potential positive divergence. Best to your GDP trading tomorrow.
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market
Big Up!
Triggered or waiting to trigger Monday? 🙂
See it on twitter, thx.
I cannot see it as nested 1,2, the best bear case I see it as an abc down for a bigger A
Does today’s bounce look impulsive. Don’t think so. ES displays it this corrective bounce even better.
http://tos.mx/4a6rmC
Todays Bounce is surely corrective. Strangely enough we had a nice motive upwave a couple of days ago. Its untellable and inconsistent, Perfect chaos.
Have a great weekend Tony, All.
First signs of fib control, new Bullish above bearish below level ES. http://t.co/vVTCriBOdB
thx HD u 2
Thanks Tony and HD! Have a great wknd everyone!
Bought more SPY puts at 198.30, out to Nov to replace Oct 3 puts closed out yesterday. Thought we would get a bit more on the upside today but this was a nice reaction. Looking forward to seeing where Tony and others think we are on OEW. I’ll certainly do a full analysis this weekend as things are getting interesting
In my modest opinion this become an UNTRADABLE market this week…
WTF? This is a perfect market to trade, what are you talking about!! Large swings, in both directions, what else do you want to trade?
LOL Exactly right!
1987 is 21 fib # from 1966
next is 34 = 2000
HWB = 1993
Risk/reward still best on short side from 1985 where I went short. Bearish nest of 1’s and 2’s for huge drop on Mon?
blackjack, great call so far. my congratulations & thanks for posting it.
uh oh, be careful- when I said we drop from here I got attacked by a group on goons, lol. I see us dropping to 1940’s in a 3 down or a c down
or ABC down from the 2019 high and it’s now complete. I don’t like the look of the nested ones and two’s, seems the retracement is too deep on the second two. So I’m favoring ABC from 2019, that 2019 was the top of a 5 up from the early August low and now we’re beginning the next 5 up.
What’s wrong with textbook expanded flat C=1.62A =1966 and positive divergence? Ya think the moves down were just too fast and impulsive?
the only thing wrong is that pattern can not be called a flat
a flat occurs when the a and c are near equal levels
if anything it was a zigzag
I don’t like the severe divergence of NYAD combined with HO signal on the clock. Also no close below lower daily BB on NYMO like at 1905. I may be wrong but just going with probabilities as usual.
Tony what about this?
http://www.elliottwave.net/educational/basictenets/basics3.htm
“Far more common, however, is the variety called an expanded flat, which contains a price extreme beyond that of the preceding impulse wave. In expanded flats, wave B of the 3-3-5 pattern terminates beyond the starting level of wave A, and wave C ends more substantially beyond the ending level of wave A, as shown in Figures 16 and 17.”
and
http://elliottwave-forecast.com/technical-blog/the-elliott-wave-expanded-flat-correction/
EWI?
rest my case
or call it Irregular Flat I guess
http://thepatternsite.com/EWExpanded.html
Tony, how much of EWI’s stuff do you think is wrong? Do you agree with Elliot’s Wave Principle book? I’d assume you have a copy. Any scanned versions out there?
Maybe we will get a 3% lock limit down? Haven’t seen one of those in a very long time.
On balance I’m with Pima, and I’m staying long, glta.
The first books I ever read on EW was Elliott’s and Frost/Prechter.
Got the basics, then did my own research.
That was over 30 years ago.
Have not looked at the books since.
So can not answer your questions.
My research was not to make comparisons, but to find out if it worked.
Lunker I agree, 1987-1990 is how I see it and have order to go short there as I agree with BJ that next leg from 1987-1990 is down….. come monday
So in March and April intermediate two was that a zigzag for you?
Thanks Tony
SPX @ resistance on chart I posted last night.
GL & Good Weekend All
Ooo, nice charts gtoptions. thanks.
My guess is this would be a good area to lighten up for a couple of months. Based on spider sense and nothing else. SPX 1985
Even though the market has been rolling over and volatility has risen, it’s still Friday, which means it’s time to pay everyone’s favorite game – SMASH THAT VIX!!
That’s right kids, the game where your local criminal bankster, in cahoots with others crooks and market manipulators, systematically and artificially smash the VIX contract lower in the last 2-3 hours of trading on Friday afternoon, just to have it bounce back up on Monday. Say it together – SMASH THAT VIX!! YEAHHHhhh!
yay!!!! marquis of queensbury rules?
Yeah, maybe some anger management here I think.
buddy, that’s why its nice to have another or numerous blogsites.
if it’s that regular, just sell the VIX on Friday morning, buy it back at the close. 😉
I trade the VIX in both directions and I certainly know that you don’t hold VIX long trades into a Friday afternoon. If anything, short the open and buy the VIX with about :5min left in the trading day.
lol. instead of the criminals it could be the players that trade the vix know that is a common thing to do so they short it and there are no buyers hence it goes down. I closed my vix early afternoon when it started to go down after consolidating. prolly buy it back near the close to play the usually Monday bounce. gl
Art Cashin is seriouly losing touch of the market as he stated high gdp number would bring market down today I remember 2008-09 he was wrong way on his calls as market kept doing opposite as his calls
consider his motives…who is he working for, the TV viewer or the Wall Street guys?..maybe it’s his job to be perpetually “wrong”….
Ultimate short squeeze.
It’s a month and quarter end on Tuesday. Da Boys will make sure we close high
My guess is SPX will close up 30 today, just to tease the bears
Man Proposes
God Disposes
oneandonlyuniverse says:
September 25, 2014 at 10:26 am
i see $spx getting back close to spx$1991 today early or fri a.m. ….and me buying more $baba
No worries 2027.74 on the come
“So nothing is ever good or bad unless you think it so, and vice versa. All luck is good luck to the man who bears it with equanimity”
“There is no training — classroom or otherwise — that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. There’s typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign.”
namaste
CN (@Cygnet_Noir) says:
September 25, 2014 at 10:59 am
I’m looking for SPX to trade 1946.xx today or Friday AM.
oneandonlyuniverse says:
September 25, 2014 at 12:33 pm
need to adjust target $1985 -88 but 91 is def in play
good call one. a little off on your timing but I will give it to u. 😉 hehehe
Im sure CN went long on the break out of 1975 like he posted about. It was a good set up.
Not really, It was 11:37 a.m in LA , but it’s 32k on the positive ledger is all that matters.
well done, One!
yessireeebobby. quite a nice call.
yessireebobby. nice call. blackjack also made similar nice call.
32 K? u rich
Hi Tony, curious why you were 60/40 leaning towards P4 when so far this looks like a standard expanded flat to 1966 and holding the 1973 pivot. Is there something else you’re not liking?
lunker, u think that P4 is underway?? thus we see that 1973 held and we are testing higher. Waiting for your reply thanks
weekend update
So Tony there is 60% chance that P4 is underway 🙂 hope really that.
Thank you Tony for all this work!!!
Best regards and have a great week end
Breadth still sucks and the ole HO still on the clock?
Hey Newbie it was quite delightful to experience you actually in a trade yesterday lol
I could tell b/c you were quite anxious about the next move of the SP later yesterday hehe
Hey Pooch, good call yesterday of course. And today looks pretty freaking strong indeed. But I don’t think I am selling my TVIX just yet. Held in for the new highs which was tough, its easier down here.
walter your tvix is gonna surge, big drop is coming from here to 1940
RC,
Has credit stabilized throughout the day and any word on bids? Thanks
Rc,
I also meant to ask about CDS spreads. Thanks again.
Just btfd again bears toasted once more…un believable but as i stated yesterday big bounce today,probably get it all back by Monday close.3 still on 4 case dying again
newbie how’s 1940 working out for you?
it’s coming don’t claim victory yet grasshopper
imanewbietrader u think after we reach 1985 it will drop back to 1945?? monday or tuesday? thanks
My chart likes S&P stopping at 1985…… wave 1 at 1966 wave 2 at 1985 wave 3 at 1943, or even an a at 1966 a wave b at 1985 and a wave c at 1940. With anything in life & especially trading you never know. Best of luck.
LOL
Imanewbie is Cool…he is the eow resident permabear.
My chart was expecting this bounce in between here and 1985 we drop like a rock
Sure.
Yes it does wave 1 at 1966 wave 2 at 1985 wave 3 at 1943, or even an a at 1966 a wave b at 1985 and a wave c at 1940
Sure sure
You say we can stay o.s for few more days,i say 1 and 2 charts are buried rally tomorrow… we got time yet to get all back plus some.
waiting for 1980ish/hwb. see what if anything happens
Next stop 1945 on spx
You have a way of opening your mouth at absolutely the worse time !!
🙂
I actually didn’t open my mouth at all, I just hit a few buttons on my keyboard. 😉
Will see, If it clears here, its another meal for the Bulls. More bear stew.
yet another HWB in the works? rinse, repeat. yawn
…….Just sayin’
S&P hourly
Far out and outa sight.
doom and gloom fail again when you have the largest economy clocking 4.6% GDP you know the sky is not falling this ups and downs won’t change the up trend until we have leahman brothers scenario ( doubt it)
..maybe US is strong enough to carry the rest of the world on its shoulders for a while ? A strong dollar is beneficial to a lot of foreign sectors too like shipping.
agree GDP strongest reading in 2.5 years and Russia losses are USA gains…serious investment coming back to USA as economical sanctions on Russia make multinational companies reluctant to invest again unfortunately many on this blog talking about S&P 666 and 1000 do I think S&P can go to 666 sure tomorrow if north Korea nuke South Korea or Putin just go mad but then you need to worry about food shelter and ammo not S&P pivots lol
In the end an elevated USD Will Benefit Russia a lot…think Putin wants his nat gas in USD sooner rather than later. Also, a growing US economy Will find imported goods cheaper and cheaper lifting other boats too. Sure the multinationals may suffer if they are only exposed to outside of the US.
you believe what the govt feeds you? I don’t and good luck believing in fabricated numbers….just saying
nickokc, no offense to you- but you seem very complacent. You say Doom and gloom fail again???, how can you make this comment- the market has only been open for 4 hours since yesterday bloodbath. You commented ” the largest economy clocking 4.6% GDP” Would USA government ever fudge numbers? Would they ever change their mathematical equations to make things appear better then they are? Are you seriously trading/ believing everything the news and what the media tells you?
Possible. But that GDP number is about a relevant as the fact that I weighed 169 pounds in High School. 220 now 30 years later.
I don’t trade guys I invest long term and when I play short term I do only with money I can afford to lose…been debt free for years …I’m not going to debate Gov numbers because I can debate the whole validity of fiat money and monetary system and how money get created and conversation will go on and on “fractional reserves” “futures speculation” “derivatives” ” wars and economy”….Tony might ban us if we take that route…
Stuck in a wedge the past four hours; hopefully the breakout will tell us which way it’s going
so far SPX looks like a rounded bottom
http://thepatternsite.com/roundb.html
good call.
IMO The decline from 2019 looks and feels similar to the decline that start on July 24th
Not sure y this posted on wed update? think being short copper is a good probability, pretty low risk, and good return place to have some money allocated to. The trend is down. Its been hanging around $3 for a long time. If it breaks down could have a nice move. I have a position. gl
just another thing to add to the very long list of things that make no sense: Spending hundreds of millions to produce the penny. 😉
Have a great weekend all.
Buy signals issued on 30/60 min SPY but not biting yet. NYA also showing positive divergence. Would like to see what happens EOD before making a move, if any…
http://greenlander1.blogspot.com/
Burned off the extreme oversold readings and take a shot back at breakeven check out the temperature?
A break and hold above that SPX 1975.79 reaction level from yesterday’s AM session would likely change the scenario I set forth yesterday. It would increase the odds of the 1956 pivot range holding, imo.
But I’d also say that it is a very cheap short at this level, because if price doesn’t drop here and now, there is no reason to stay short on anything I short right here.