friday update -- MrSwing

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friday update
Feb 28, 2009

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: DOW nears 7,000 after poor Q4 GDP report, DOW -119

Overnight the Asian markets were mostly lower. Europe opened lower and closed -2.35%. US index futures were quiet overnight, but sold off after the Gov't announced that it was swapping its preferred shares in Citigroup for common at $3.25/share. Then at 8:30 the revised Q4 GDP came in at -6.2% vs. the -3.8% the Gov't initially reported. This was the largest quarterly drop in GDP since 1982. At the open the market gapped down to SPX 735 in the first few minutes, right at the 734 pivot. The market stabilized at that level and tried to rally. Near 10:00 the Chicago PMI was reported at 34.2% v 33.3%, and Consumer sentiment edged up as well 56.3% v 56.2%. The rally continued until noon when the SPX hit 750. A pullback to 742 followed, and then a double top occurred at SPX 751 by 2:00, nearly filling this morning's gap down. The SPX then tailed off to retest the lows at 735 and closed there. For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -0.95%. Bonds gained 3 ticks, Crude slipped 75 cents, Gold was flat, and the Euro was lower. Support for the SPX remains at 734 and then 717, with resistance at 768 and then 789. Short term momentum was oversold at today's lows and then moved higher.

With today's new intraday bear market lows in the SPX/DOW we need to start looking for a potential completed downtrend. This last wave down, Minor 5, has met the minimum requirements by making a new low. The pivot at SPX 734 held well today, just as it did at the Nov 2008 low. Will take a close at all the markets this weekend. Best to yours!

MEDIUM TERM: downtrend

LONG TERM: bear market

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