monday update -- MrSwing

You Are Here: Home > Articles > Commentary > monday update

monday update
Jul 28, 2008

Tony

the ELLIOTT WAVE lives on
More articles

Font Size:

SHORT TERM: financials drag down market again, DOW -240

Overnight the Asian markets were mostly higher, but Europe opened lower and closed -1.05%. US index futures traded flat overnight and the market opened relatively unchanged. By 10:00 the SPX had moved up to 1260, but that was the high for the day. After that, today looked pretty much like thursday, (a gradual decline), but not as severe. At 12:00 Fred Mishkin gave his last speech as Fed governor: http://www.federalreserve.gov/newsevents/speech/mishkin20080728a.htm. It certainly looks like he was making a point about the FED setting guidelines for employment and inflation, and then ignoring them when they are inconvenient. Then at 2:30 a statement was released by FED governor Warsh: http://www.federalreserve.gov/newsevents/speech/warsh20080728a.htm. Neither comments seemed to stir the market much as it continued to decline right into the close. For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -2.20%. Bonds gained over 3/4 points, Crude added $1.45, Gold rose $4.00, and the Euro was higher too. Support for the SPX slipped to 1219 and then 1179, with resistance at 1240 and then 1261. Short term momentum is quite oversold, and the near term indicators are oversold as well. Tomorrow Case-Shiller at 9:00, then a consumer sentiment reading at 10:00.

Today the market closed at the extreme lower limit of the 1240 pivot (1234). Should the market continue lower tomorrow support is at SPX 1219, and then a potential double top scenario would still be in play with a rally to SPX 1287. There has been some suggestions that the recent rally was a wave 4 of the downtrend. This count can't be totally ruled out, but it would be out of chartacter for the downtrends already experienced in this bear market. Best to your trading!

MEDIUM TERM: downtrend bottomed at SPX 1200

LONG TERM: bear market

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