tuesday update -- MrSwing

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tuesday update
Aug 19, 2008

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: financials lead market lower again, DOW -131

Overnight the Asian markets were mostly lower. Europe opened lower and closed -2.35%. At 8:30 housing starts were reported down 11%, making new lows to 1991 levels. The July PPI was reported +1.2% exceeding estimates. I read four short articles on the PPI, and could not find one that quoted the annualized rate of change. So I ventured to the FED's website and did the calculations myself, annualized rate +9.9%. No wonder the controlled media didn't mention it. While at the FED I compiled this chart: http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s[1][id]=PPIFCG&s[1][transformation]=pc1. This is non-seasonally adjusted PPI finished goods, from the 1940's to present, directly from the FED. It actually looks to be over 12%. At the open stocks gapped down on the news as the SPX hit 1274, below yesterdays low in the opening minutes. That was the high for the day. The decline continued until 12:00 when the SPX neared the 1261 pivot and hit 1264. A slight bounce to 1271 by 1:30 was followed by a slightly lower low to 1263 by 3:00. After that, like yesterday, the market bounced around into the close. For the day the SPX/DOW were -1.05%, and the NDX/NAZ were -1.30%. Bonds were up two ticks, Crude rallied $2.40, Gold gained $19.00, and the Euro was higher. Support for the SPX remains at 1261 and then 1240, with resistance at 1287 and then 1316. Short term momentum was quite oversold this morning, and was heading higher into the close. The near term indicators are beginning to get oversold as well. Tomorrow the economic slate is clean, so it should be all technical. The SPX has still not confirmed a wave one down, but is getting close. The DOW, however, did confirm today and it is again leading the market. After the SPX confirms we can start counting a new downtrend. Selling continues in the financials, and the techs are following. 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