monday update -- MrSwing

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monday update
Aug 26, 2008

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: market starts week to the downside, DOW -242

Overnight all the Asian markets were higher, and Europe opened higher but closed -0.70%. At the open the US market gapped down to 1285, from fridays close at SPX 1292, and that was the high for the day. At 10:00, the NAR reported July existing home sales rose 3.1%, but the supply of unsold homes rose to 4.67 million. The highest it has been since 1968. The market bounced around a bit on the news and then headed lower. By 1:00 the SPX hit 1266, then edged up to 1272 during the next two hours. Then there was another push lower in the last hour, to a slightly lower low at 1265. At the close the SPX/DOW were -2.00%, and the NDX/NAZ were -2.10%. Bonds gained over 3/4 points, Crude added 60 cents, Gold slipped $6.00, and the Euro was lower. Support for the SPX drops down again to 1261 and then 1240, with resistance at 1287 and then 1316. Short term momentum was oversold nearing the close, and the near term indicators turned lower. Tomorrow the Case-Shiller home pricing report will be released at 9:00. Then new home sales and consumer confidence at 10:00. Also, the FOMC minutes will be released at 2:00. Interesting day!

After hitting support at exactly 1261 last wednesday. The market rallied to 1293 on friday. Now after one day of trading the SPX is again threatening to break important support at the 1261 pivot. As reported over the weekend. A break above SPX 1301 would have indicated a continuing uptrend. A break below the 1261 pivot would suggest that the 1313 high was the end of the uptrend, and a new downtrend was underway. Tomorrow we may get our answer. Best to your trading!

MEDIUM TERM: uptrend high at SPX 1313

LONG TERM: bear market

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