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friday update
Jan 23, 2009

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: early market selloff leads to late day recovery, DOW -45

Overnight the Asian markets were all lower. Last night the FED released its M1 multiplier report. This measures the velocity of money in the economy: http://research.stlouisfed.org/fred2/series/MULT. Europe opened lower as the UK declared it was in a recession, Europe closed -0.50%. US index futures were sold off heavily overnight and the market gapped down at the open. Within the first few minutes the SPX traded as low as 806, above tuesday/wednesday's 804 low, and then started to rally. By 10:30 the SPX rallied to 822, then pulled back to 812 by 11:00. When additional selling did not appear, the market rallied to SPX 839 by 2:00. For the third day in a row the market sold off early, traded around SPX 805, and then rallied into the close. Interesting. When the market failed to break through resistance, near the SPX 848 pivot, it pulled back to 825 by 3:00. Then a slight bounced finished off the day and the week. At the close the SPX/DOW were mixed, and the NDX/NAZ were +0.75%. Bonds were down 6 ticks, Crude rallied $2.25, Gold spiked $39.00 (updated that chart just last night), and the Euro was lower. Support for the SPX remains at 789 and then 768, with resistance at 848 and then 912. Short term momentum hit slightly overbought at the highs of the day.

The market remains range bound between SPX 804 and the OEW pivot at 848. In the mean time several of the foreign indices have recently confirmed downtrends: DAX, ASX, BSE, HSI and NIKK. These markets now join the SPX, DOW, TRAN, NYA and the financials in confirmed downtrends. It doesn't look too promising for the bulls. Today Gold broke out of that overhead down trending resistance line, see daily chart, as its uptrend from the November lows continues. Best to your weekend!

MEDIUM TERM: SPX downtrending

LONG TERM: bear market

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