friday update -- MrSwing

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friday update
Dec 13, 2008

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: market recovers from sharp overnight selloff, DOW +65

Overnight the Asian markets were mostly lower. Europe opened lower and closed -2.30%. US index futures were sharply lower overnight as ES dropped below 830 before midnight. From that low it rallied into the early morning, and at 8:30 the PPI was reported -2.2% v -2.8%. Also at 8:30 retail sales were -1.8% v -2.9%. The market gapped down at the open hitting 851 in the opening minutes. That was the low for the day, and right around the 848 pivot. The market rallied to 867 by 10:00, when consumer Sentiment was reported at 59.1% v 53.5%, and Inventories were reported at -0.6% v -0.4%. Then a pullback to SPX 857 by 10:30 was followed by a zigzag rally to 880 by 1:00. A steeper pullback to 863 then occurred by 2:30, but this was followed by a rally to the high of the day at SPX 883. Which is the level the market broke down from yesterday. All in all a good recovery after negative technical action yesterday. At the close the SPX/DOW were +0.75%, and the NDX/NAZ were +2.20%. Bonds were up 16 ticks, Crude slipped $1.25, Gold dropped $5.00, and the Euro was higher. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum was oversold this morning and rallied to neutral during the day. Some additional positive technical news for the bear market rally from the currencies. The USD is now in a confirmed downtrend, and the Euro is uptrending along with Gold and the GPX. Also of note, a very short term negative divergence appeared in the last hour of trading. This might lead to some downside early monday. Best to your weekend!

MEDIUM TERM: downtrend low at SPX 741

LONG TERM: bear market rally underway

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987