thursday update
at 2007-02-06 15:26:24
SHORT TERM: stocks tick up at the open, then head downhill all day.
Today was obviously sell a everything day. Everything on my monitor was in the red; Bonds, Crude, Gold, and Stocks. This morning I was expecting a small pullback, then another short rally to put in a negative RSI divergence short term top. The pullback started, but the rally never came. The long term EW 1438 pivot point provided much more resistance than expected. The previous SPX 1383 pivot point was also met with heavy resistance, as the SPX dropped about 2% over the next few days. Since the low for the techs in the first week of January, and the cyclicals in the second week, this market has been heavily retracing every rally. The OEW medium term trend in the major indices remains up, and I am staying with it and remaining bullish. The market has produced two rallies from the recent lows, and all the major indices have posted new bull market highs in the past week or so. Short term, however
friday morning at 2007-02-06 15:26:24SHORT TERM: market starts higher, but again turns lower.
Overnight the few Asian markets that were open closed mixed, and Europe came in about unchanged. Stock index futures edged up after the Dec. Durable goods orders were announced to be +3.1%, and up 7% for 2006. The market opened higher, but within a few minutes selling again hit the tech sector and the market headed lower. Just after 10:00, when Dec. New home sales were reported to be higher than expected, (+4.8%, but -17.3% for 2006), the market made a short term low. Bonds are trading down a few ticks, Crude 80 cents higher, Gold down 40 cents and the Euro is down. At the lows, the major indices penetrated the support levels mentioned in yesterday afternoons post, then quickly bounced back. The cyclicals are now the most short term oversold they have been in 2007, and the tech sector is displaying a positive RSI divergence at the lows. The market should rally from this oversold conditon, and the extent of
friday update at 2007-02-06 15:26:24SHORT TERM: stocks closed mixed after testing support.
The market opened higher, but quickly turned south in what appeared to be choppy trading, but clearly 5 waves down from yesterdays highs on the hourly charts. After completed that short term pattern the markets rallied a bit into the close. If this 5 waves down completes an irregular top, the market should resume its uptrend. If the 5 waves down is a sign of a impending more significant correction, the recent lows will not hold. Unfortunately, the market has given us a clue, but still leaves us with an inconclusive outcome going into the weekend. Tuesday, Q4 GDP will be released, and the FED starts a two day Open Market Committee meeting. If the uptrend is in Bernanke's hands we may not get a resolution until thursday. With the OEW uptrend intact, I would anticipate a more dovish statement from the FED. Maybe FED member Lacker, who has been very hawkish against inflation, will finally join in with the cons
weekend update at 2007-02-06 15:26:24REVIEW:
A choppy week, as monday's selling rebounded with new highs in the cyclicals by wednesday. But when the techs failed to follow, slightly new lows for the week were made by friday. For the week, the SPX/DOW/NAZ closed 0.6% lower, and the NDX was 1.3% lower. Going into the previous week, the NDX/NAZ were coming off new bull market highs.
LONG TERM: bullish
The Oct 2002 bull market continues, as many have capitulated in recent months. Bullishness had reached its lowest level in over three years at the July 2006 lows, and is now back to normal levels. The bullish OEW wave count has remained the same since Oct 2002, (see weekly charts on CHART LINK). Primary waves I thru IV completed in Aug 04, and an extended Primary wave V is underway. Major waves 1 and 2 of Primary wave V completed in Apr 05, and a subdividing Major wave 3 is underway. Intermediate waves i and ii of Major wave 3 completed in July 06, and Intermediate wave iii is
monday morning at 2007-02-06 15:26:24SHORT TERM: stocks open mixed then start to rally
Overnight the Asian markets were mixed and Europe came in about 0.25% higher. Stocks opened mixed, and after a few minutes started to rally until just past 10:00. Then some selling entered the tech sector, and stocks pulled back a bit. Currently mixed on the session. Bonds are flat, Crude is up 50 cents, and Gold has come off earlier lows to be down 20 cents. Thus far, the market is rallying off the short term oversold condition, and the techs are trying to rally off short term their positive RSI divergence. With Q4 GDP and the FED over the next few days the market might stay relatively quiet with a positive bias until wednesday. Thus far today, there doesn't appear to be much conviction one way or the other. Best to your trading!
MEDIUM TERM: bullish
LONG TERM: bullish. |
