wednesday update -- MrSwing

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wednesday update
Jan 07, 2009

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: overseas selling leads to a sharp pullback, DOW -245

Overnight the Asian markets were mixed, as Hong Kong and India sold off sharply. Europe opened lower and closed -2.05%. US index futures were lower overnight, and at 8:15 ADP reported the December monthly job loss at 693K v 476K, an increase of over 45%. The market gapped down at the open to SPX 923. It closed at SPX 935 yesterday. Just past 10:00 the Congress Budget Office reported an estimated budget deficit of $1.2 trln for 2009. That set the tone for the rest of the day. By 11:00 the SPX hit 913, and then tried to rally. By 12:00 the SPX reached 921 and started to head lower again. Just before the close the SPX hit 902, several points below the 912 pivot. A small bounce into the close took the market off the lows for the day. At the close the SPX/DOW were -2.85%, and the NDX/NAZ were -3.00%. Bonds were up 6 ticks, Crude lost $5.75, Gold dropped $24.00, and the Euro was higher. Support for the SPX drops back to 848 and then 789, with resistance at 912 and then 935. Short term momentum is oversold, and very short term momentum is displaying a positive divergence. Tomorrow, the weekly Unemployment claims at 8:30, and then Consumer credit at 3:00. Friday, the monthly Non-farm payrolls report.

Today the market pulled back following a week long rally from SPX 857 to 944. After breaking through the 935 pivot yesterday, we expected the 912 pivot to now act as support on any pullbacks. Today's low was 902. With a slight very short term positive divergence right at the close, the market should experience a bounce higher tomorrow. Best to your trading!

MEDIUM TERM: uptrending from the SPX 741 low

LONG TERM: bear market rally

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