Home > Articles > The Markets > thursday update

thursday update

Tony

the ELLIOTT WAVE lives on
More articles

Font Size:

SHORT TERM: financials drive the market lower, DOW -283

Overnight the Asian markets were mostly higher, but Europe opened lower and closed -1.50%. US index futures traded flat overnight, and at 8:30 the weekly unemployment report rose to 406K, its highest level since March. The market opened about unchanged as the SPX traded to 1283 in the opening minutes. That was the high for the day. At 10:00 the NAR reported existing home sales dropped 2.6% to the lowest level in 10 years, and are now down 33% since the 2005 peak. The inventory of homes for sale have now reached their second highest level in over 20years. Traders responded by selling off the banks and financials, taking the market lower. Throughout the day, the SPX never had as much as a five point rally as it moved lower and lower into the close, the low for the day SPX 1251. At the close the SPX/DOW were -2.35%, and the NDX/NAZ were -1.75%. Bonds rallied over one point, Crude gained 95 cents, Gold added $5.00, and the Euro was flat. Support for the SPX now drops back to 1240 and then 1219, with resistance at 1261 and then 1287. Short term momentum is now extremely oversold, and the near term indicators are getting there as well. Tomorrow durable goods orders at 8:30, then new home sales and consumer sentiment at 10:00.

After running into resistance at the 1287 pivot as expected, the market has pulled back from the 1291 rally high, ending a small wave A. Expecting the 1240 pivot to provide support tomorrow to complete a small wave B. Then the market should resume its rally into the 1327 pivot by early August to complete this advance. Remember the pivots noted are pivots and not exact support levels. Usually the market will settle with +/- 6 points of the pivot. 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