SHORT TERM: another volatile FED day, DOW -223
Overnight the Asian markets gained 1.2%. Europe opened lower but gained 0.8%. US index futures were lower overnight and the market gapped down at the open to SPX 1896. The market had closed at SPX 1904 yesterday. After an opening bounce to SPX 1903 the market dropped off to 1887 just past 10am, and then started to rally. At 10am New home sales were reported higher: 544K v 490K. The rally continued until 12:30, along with a rally in Crude, to SPX 1917. The market drifted lower to SPX 1906 just ahead of the FOMC statement and forecast at 2pm, and then started rising just before their release: http://www.federalreserve.gov/newsevents/press/monetary/20160127a.htm, http://www.federalreserve.gov/newsevents/press/monetary/20160127b.htm. Right after the statements the market hit SPX 1916, an then headed lower. The initial reaction was down to SPX 1894, up to 1904, and then selling to 1873 just past 3pm. After that the market rallied to SPX 1885, then dipped to close at 1883.
For the day the SPX/DOW lost 1.25%, and the NDX/NAZ lost 2.35%. Bonds gained 2 ticks, Crude rose 50 cents, Gold rose $4, and the USD was lower. Medium term support drops back to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: weekly Jobless claims and Durable goods at 8:30, then Pending home sales at 10am.
Volatile day! After the market opened with a gap down, hit SPX 1887, and then rallied past 1909 we marked Monday’s 1876 low as Int. B. Then the market hit SPX 1917, dipped, and hit 1916 just after the FOMC statements. After that it was all basically downhill for the rest of the day. In the last hour of trading the market dropped below SPX 1876, suggesting the entire pattern from 1812-1917 had completed with a complex double zigzag: 1909-1876-1917. At first glance this rally looks too small to be a Major B uptrend – no confirmation either. Some in our group have mentioned it could be just Int. A of Major B – possible. With the market in bear mode, and risks mostly to the downside, will accept the completed pattern, await more market data and see where it leads. Project, monitor and adjust. Crude, btw, hit its highest level of the week just before the market sold off. Overall, being long in a bear market for anything more than a short period of time, is as risky as being short in a bull market. Short term support drops to the 1869 and 1841 pivots, with resistance again at the 1901 and 1929 pivots. Short term momentum hit overbought right at today’s high and went right down to oversold. Best to your trading this volatile market!
MEDIUM TERM: potential uptrend hits inflection point
LONG TERM: bear market
Tony.
What if Russia and Saudi do reach a deal and cut production as they did on 15th March 2009 to the braoder markets.
http://www.theguardian.com/business/2009/mar/15/opec-rules-out-oil-production-cut
http://www.opec.org/opec_web/en/945.htm
Actually OPEC cut months before that
Been going through charts of all the companies after earnings. Wowza! More proof there is no liquidity in the markets. up or down.
short every bounce 😉
buy em low and sell em high 😉 I’m a buyer above SPX1869.
Thank God 100% of GDP comes from Under Armor and Facebook otherwise we’d have no growth in this economy. wheww
hey jonny, unfortunately for the bulls there is still growth. When there is no growth or negative growth it will be time to load the boat long. 😉
b already had an a, a b and a c1 now in c2
1903 breaks the pattern
Speaking of gut feeling – Tony, anything you could share with us today?
Q4 GDP tomorrow might be better than expected
This would be a nice break for those of us trying to unload long positions and enter short positions if this trading range broke upside for a few days.
GDPNow as of today expects 1.0% while estimates are calling for 0.7%
….. nonetheless, this will be the 2nd weakest 4Q GDP of the 2009-2015 C1 bull market.
Year 4 Qtr GDP
2015 0.70% estimate
2014 2.10%
2013 3.00%
2012 0.10%
2011 4.60%
2010 2.50%
2009 3.90%
2008 -8.20%
bought bonds looking for post triangle thrust to 163 ZB
Tomorrow marks the end of January trading. The August SPY low was 191.61. Ummm, that would be an analytical challenge as I’ve been thinking that if we held monthly support at that level, I would be looking for the impossible – P5!. Unfortunately, think I’m spending the long (Mexican) weekend in Atlixco, un Pueblo Magico, outside of Puebla. Wife will be grumbling if I am looking at my computer. 😦
At this level, SPY will also be hitting the downward trending 20 DMA. Perhaps By Feb 29, the market will have been shaken out and be making progress on the upside? Better we just sell off tomorrow so I can have mole and cemitas on my mind instead of puts and calls this weekend
RAY DALIO: The 75-year debt supercycle is coming to an end
“We are seven years into the expansion phase of the business/short-term debt cycle — which typically lasts about eight to 10 years — and near the end of the expansion phase of a long-term debt cycle, which typically lasts about 50 to 75 years.”
What I am contending is that there are limits to spending growth financed by a combination of debt and money. When these limits are reached, it marks the end of the upward phase of the long-term debt cycle. In 1935, this scenario was dubbed “pushing on a string.”
“As a result, it is difficult to push the prices of these assets up and it is easy to have them fall. And when they fall, there is a negative impact on economic growth.”
http://www.businessinsider.com/ray-dalio-ft-opinion-long-term-debt-2016-1
Basically he thinks we are in or about to enter a bear market- and it’s going to be pretty severe
there is nothing cheerful in a deflationary bear cycle
except for long treasuries and shorts =)
absolutely – TLT or TMF and SPXU.
I am already there. I just hope TLT doesn’t do what it did last February. Yikes!
No, but what other choice is there? People have had ample warning
I agree with Dalio. Haven’t read the article, but I think it’s going to be longer than one or 2 years. Prepping for 5 years, just in case.
From NorthmanTrader: January 28, 2016 – A fascinating chart: Daily high/lows…
That looks like a good case for an on-going P4.
A chart that only goes back 5 years says very little. Too small of a sample wet to be useful.
for sure…the implication from Aug/Sept is the market will go higher but that is only one point of reference…what is your thinking Mike?
The SPX may be starting an Uptrend (at Tony’s inflection point). Whether it’s P4 ending, P5 beginning, or a Bear market rally remains to be seen. In any event, for the short-term it doesn’t matter to me. What matters is the current trend. (As I write this the SPX once again seems to be giving back today’s gains, again. Guess we have to “bear” that in mind.)
From this morning’s low,it looks like 3 waves up followed by a triangle that could have completed.
bear flag forming the last day and half within a giant bear flag that has forming the last month.
small triangle from 1915 to 1872 which way does break ?
up
SPX
i didnt post this over theweekend ..but i was wondering if this last decline is five waves…
.down to boll band for wave 1 ….bounce up for 2
push boll band down in wave 3
the overlapping ending diagonal for wave 5
with sharp rally after diagonal
the rally so far has retraced 38 % and we cant get above ext short level
what if the decline is only wave 1 of c down??? weak bounce wave 2 up with 3 of c down ahead…… anyone ? anyone??? bueller ??
I tend to think this is a wave 4 with a wave 5 to come Phil – target 1770 ish into 3-5th Feb where the Bradley turn is waiting.
those bradley turns work best when there is wild emotional trading and not sideways chop right ??? at least thats what arch crawford used to say
I think you’re likely right Phil but we’re still a few days away from 3-5/2.
My point being it’s choppy right now before a final (perhaps terminal move) down that finally actually scares the sh*t out of people and then the TURN kicks in. We’ll see come the date.
Personally I see a lot of people saying there’s a lot of pessimism around and panicking etc. but if you ask me I simply don’t feel it just yet. I don’t feel there’s real panic yet. Mind you it’s potentially only Major A. What will Major C of Primary A feel like let alone Primary C.
Just jumping in to say that I’d done a study for the past few years for em, and that’s a good way of describing it. The way I put it was that at 5+ week extremes (high or low) near a Bradley date, that’s where reversals were often marked. Not always though.
Wow you can pin today’s rally on FAG = Facebock Amazon Google
and all the other stocks are behind 😉
I am looking for a fast move down to at least 1860/50 to decide if it is the c of B or other. At this point, over 1902 and it will be other. So prepare for following strong 3rd wave up ( C?) if support hold that or resistance brakes or for a 3rd C down if 1852 is broken.
Anyhow, thesis a B of any of that moves
And more likely b ofB……never ending. So c down than up. But need to go fast
Cant publish chart, don’t know how. But after the b of B complete, if doesn’t breaks 1850, the higher could be 104 points up, since C should be equal A, if not extends.
Hi Francesca..
So if “other” clicks then it means you are looking for a new high in Spx ?
Do you have a chart or explain your count ?
* please explain your count ?
Chop fest – looks like some triangle formation since FOMC…
XLE breaks resistance in 3 months declining channel
short 1890 es
is this extension short at 1892 es ever going to hold???
FWIW:
Why would the Fed undo the 0.25 rate hike?? What is the impetus for it?
It would be a much worse move to undo it and publically acknowledge that the U.S. can’t handle such a minor hike. and if they did… then what? Hold hands and pray that Facebook keeps the markets going up forever?
The real problems are that there is way too much leverage in the system (again) and far too many $hitty bankers and investors who can’t survive without direct deposits from the Fed into their bank account.
Technological innovation opened up much more oil to the world leading to a glut, low prices and collapse of the EM economies. The Fed isn’t responsible for that.
“Why would the Fed undo the 0.25 rate hike?”
Was this a discussion in the report or by FED members yesterday or just media ?
Just the media. No discussion by the Fed. Nothing changed yesterday and they left the possibility of additional hikes open.
Unfortunately the rumors continue.
Not much to convey, lets see how far the dead walks 🙂
http://www.finviz.com/fut_chart.ashx?t=DX&cot=098662&p=d1&rev=635895800637301858
don’t know if anyone would call this a bear flag but it is interesting to see at this point in time.
Here is a thought.
In the Telegraph, their folks were suggesting China does not have the same amount of problems as Europe. This coupled with the chart of ratio of commodities/stocks, maybe commodities along with all the unloved (really cheap) emerging markets are the way to go.
RUSL, YINN, EDC, LBJ. and of course DBC for commodities with an extra splash of UWTI, and UGAZ.
Now we have to have representation from the States – TLT, SPXU (overpriced stocks)
There you go – no waves, but they do look good in my charts, and most likely to make you money.(maybe). Think of penny stocks!
…and in case you think ‘fat boy’ is going to get his – CCJ (Cameco).
..there was a commodity guy (expert!) on Bloomberg Europe who said to buy oil – nothing to do with who is talking to who, but the length of time the ships with oil are waiting at ports (better). He thought the time to get in was now, but will not be a smooth ride.
So, what you’re saying is buy the dips and sell the rips? and hopefully the dip does not become a dip from hell..
Jim, I am thinking short the S&P, buy TLT(TMF),commodities, and emerging markets – keep as long as they are doing well. The ratio of commodities to SPX is totally out of whack, so am taking the underdogs. As long as oil holds up………….All the emerging markets got totally whacked with the Fed easing, so they should do better in a tightening (or nothing) scenario, and they are cheap.
This is not instead of our fast money daily ideas, just an addition.
Some hand holding may be involved.
Thanks!
Tony let’s say like aaMikey has been saying that PV ended at 2134 and there was no failed 5th…………..if that alternative count was a reality, where then would we be in the count ?
johnny, I didn’t say that P5 ended at 2134. I’ve always said that there are only 3 waves from 667-2135, and from there we had 3 waves down to 1867, and then 3 waves back up to either 2116 or 2082. (either end point works.) That means that 2135 was either P3, or a B wave (or X wave.) From there, it means we’re either in P4, or a huge C wave. If it’s the latter, then that would coincide with Tony’s count, except with different labels.
someone said it =) isn’t that possible? 2135 was P5?
It’s possible that someone said it, but it’s not possible that it was. =)
something like this; 😉
Got me, ask Mikey
yeah…..let mikey try it
he hates everything……..
Nobody hates EVERYTHING.
mikey does
If I want to put a story to the charts what I think the market wants to do is undo the last QE move. It makes sense. Without the intervention the bull probably should have come to an end in 11 but global QE and risk taking postponed it. Thank you Mario and Ben you green sluts!! Getting rid of that fluff would be bringing us back down to 2011 levels which falls in line with Tony’s long term bear projection and a typical 50% retracement of a move that was insane.
Well because GDX bounced back above its 50d I ll hold off on selling.I m in a gold fund so I have until 3pm to make my trade.Will watch closely.
http://stockcharts.com/h-sc/ui?s=DUST&p=15&yr=0&mn=0&dy=10&id=p27196310241&listNum=1&a=435789738
Another bullish wedge?
Mr C or B Seagle:Any thoughts on DXY making a double top at 100 (for short-intermediate pullback).I m watching DXY 60d at 98.51 for a drop to 94-96.That would of course boost gold.Thanks.
Namaste Tony!
if i want to revisit counts then the SHARP rise from Sep 2015 makes me feel it was P5 than ongoing P4 as many look at. Can you give some reasons of failed P5 as I am not finding it anywhere and it is bothering my counts again and again.
The reasons always come after the market action.
The bear market in commodities, coupled with the speculative frenzy/collapse in China has investors/traders on the alert. What would have been just a correction after the 2116/2104 high turned into some thing a bit more serious after China had, and continues to have, massive capital outflows. The rate hike didn’t help as manufacturing was already in recession at the time of the hike. No FED chair has started a rate cycle with ISM this low in 35 years. In the mean time the negatives continue to pile up.
Thanks.
Commodities started moving down from 2014. China went up from 2000 in mid 2014 to 5000 in mid 2015. Its the downfall which is always talked about. FED forgot that its Central bank to the world than only US. Its looks like a deliberate effort from FED.
The Fed isn’t and shouldn’t be the Central bank to the world. The Chinese and EU have their own banks and policymakers and are/need to be on a different path since they have different economies.
The actions of the Chinese are their fault alone because of their controlled economy and their bad bets. They invested far too much in worthless real estate- building cities for nobody and invested too much in commodities banking on the strength of the U.S. consumer.
The Fed isn’t and shouldn’t be the bank of the entire world. The EU and China have their on banks and need to determine their own policy and economies rather than rely on the U.S.
then USD must not be world staple currency. Its a currency war going on.
Manunidhi
The US military backs the world’s reserve currency.
Currency wars are with the other guys.
namaste
The FED only manages the US economy.
The ECB Europe, the BOJ Japan, and PBOC (which should be the BOC, since their people have nothing to do with it) mismanages China.
Its like saying US has no role in middle east wars till date.
A .25 raise has made USD almost unavailable in the world markets. Shortage of USD. EM’s have all debt in USD not in INR’s or Yuan’s.
added shorts 1884.5 es
stop at 1882
If you’re shorting how is your stop below your buy price? You mean 1992?
1892
no………its correct exactly as i posted it
Tweezer bottom 1929P next?
I’m looking for 1 more LL, minute c of minor c to complete int B
https://www.tradingview.com/x/S8OuHqLb/
What is difficult for me with this market is with this selloff there are actually segments of this market that are extremely attractive from a fundamental & price standpoint but then you have this bifurcation with things like Facebook holding up the general indices. They just had to beat big to spur the bifurcation further! Rat Bastards! I am actually hoping Microsoft and Amazon miss at this point so this bifurcation f-in ends. It would be so much easier if this whole thing just crapped or surged together
Thanks Tony
SPY ~ WPP @ 187.44 Third test this week. Holds then WR1/2 @ 191.16/193.46
Below WPP then WS1 @ 183.72
here is where I think most people are…………..
what the F is the count?
I think that sums it up
Can we call it “flip the coin” market…Wall Street should be placed in Las Vegas…just another casino!
seems plausible, perhaps part of a correction that has not seen its highs.
I said this yesterday before the close.
Facebook is now what Apple use to be to the market. FB is going to smash earnings after the bell and take the market higher tomorrow. I own a Digital Marketing company (www.EXPRESEO.com) and I can tell you that online marketing money is now shifted towards FB. Let’s see what happens.
With the gap up this morning me thinking that we either with double bottom from yesterdays lows or a lower high to get things moving. So far lower high with gap close. Just following with Tony’s count for a higher B.
Market is cray cray
CL
broke ext short decisively..went thru -23% target of long at 33.56
extension long at 33.54 failed its .618 level ..note thats the same as – 23% level this happens often
next meas move long at 32.04 for .50 level
…and now we take you back to our regularly scheduled program.
let me guess … I bet it is below 1800 (1780) … right?
Once it takes out 1812, then the next scheduled destination is 1736.
hmmm… OK 🙂
Shaky, shaky…walking in a swanp for bulls…
33.50 ex long cl too risky for me to buy ..could see quick plunge if if fails
holding what i have from below and waiting for next meas move
This is final part of a tiny wave 4 of a larger major 1 down…best case scenario oew1929…tomorrow(?).
ES Morning Update January 28th 2016 – http://reddragonleo.com/2016/01/28/es-morning-update-january-28th-2016/
Well that rally is petering out
Sure is… guess I’ll be wrong on that call.
I got very good at the art of shorting in the bull market.
I covered a bit too early in this bear market.
I have no clue how to go long in this countertrend rally.
Lying in wait for the next short. Anyone thinking this is PV is not looking carefully at the waves.
1901p
next 1869p?
cl
ext short broken decisively
i want to add uwti on pullbacks now
Phil, Agree.
UCO not bad either
DWTI – The production cut news stories are lies.
I made money on my oil trade. I am done with oil for awhile. Although I think DWTI probably is appropriate call I would not play it because middle east is too unstable for me to be short oil at these levels – risk to reward not good.
Saudis have no proposal to cut output
http://www.zerohedge.com/news/2016-01-28/saudis-have-no-proposal-cut-output
Just trying to say be careful of the lunatics over in the middle east – game can change in a split second.
Think a pullback in gold/GDX is here.Confirmation of GDX breaking 50d at 13.85.Gold needed to stay above 1120–did not.Silver failed above 14.50 as well.Key levels to keep the rally moving.I ll be cutting back a majority today.Good luck all.
GDX at 13.77.Could be one of those 5-6% down days.I ll look at it again at lower levels.
Seems that many were looking for the big down move today but the pre-market is rallying. As I observed the other day, the volatiity is reversing.
When that happens, prices regress to the trend line. No surprise that we are drifting. Don’t expect any big move down until price meets the 20 day average.
I have this a.m. rally as minor b of int B, then minor c down below 1,972 to complete int B, then we need an int C up to complete major B. Alt count is that 1,972 was all of int B and we’re now rallying in int c. Either way, any “big down” won’t be for a while, the market is still consolidating and needs more time to complete major B
Sorry, 1,872 yesterday – not 1,972
Any chance that the 20 DMA will just keeping dropping to meet one of the candles/bars as price drift sideways rather than northeast?
that looks exactly what is happening
Yep that’s it Gary, If this the 4th wave of Major A then it is not likely to tag the 20 DMA which is very common during bear markets.
You will probably be right.
Std chart looks like it will fall short of the 0 line. I guess sell more on any rally.
http://news.forexlive.com/!/russian-oil-minister-says-saudis-proposed-each-country-cut-production-by-up-to-5-20160128
In case anyone is wondering what caused that.
Russia is desperate for higher oil prices, they will say anything at this point.
Yea i doubt they do anything anytime soon, but it shows how explosive a short squeeze can be in oversold conditions.
Futures hour chart cluster of 3 3BR’s
http://invst.ly/-ijw
Abit clearer
http://invst.ly/-ipe
Does that mean go all in long?
No bj it doesn’t go all in long my post is specific ”A cluster of 3 3BR’S”….
zb 4hr
looks like weekly
fractal
many bond cycles peaking in this time frame
see 7: 47 am response to bob sagett
look at zb 4 hour and weekly
they look exactly the same
fractal
maybe the 4 hour can guide us to the weekly resolution
Wow – Dec durable goods just printed -5.1%
Great economy huh, I wonder what data the Fed is looking at?
/Cl breaking out?
http://screencast.com/t/Nc4DRraa /cl