wednesday update -- MrSwing

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wednesday update
Feb 04, 2009

Tony

ELLIOTT WAVE LIVES ON
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SHORT TERM: rally fades as BAC makes new lows, DOW -122

Overnight the Asian markets were mostly higher. Europe opened higher and closed +2.10%. US index futures were higher overnight, and at 8:15 ADP reported monthly employment -522K v -659K. The market opened slightly higher at SPX 839 and continued to rally to 852 by 10:30. At 10:00 ISM services was reported at 42.9% v 40.1%. After running into resistance at the 848 pivot the market began to pullback. By 2:30 the SPX gave back all of its gains and turned lower when it hit 829. After that the SPX bounced a bit and then went sideways into the close. For the day the SPX/DOW were -1.15%, and the NDX/NAZ were -0.05%. Bonds lost 14 ticks, Crude slipped 45 cents, Gold rose $15.50, and the Euro was lower. Support for the SPX remains at 789 and then 768, with resistance at 848 and then 912. Short term moomentum was quite overbought at this morning's highs and dropped below neutral heading into the close. Tomorrow, the weekly Jobless claims at 8:30 and Q4 Productivity. Then at 10:00 december Factory orders. Non-farm payrolls is friday morning, then Consumer credit in the afternoon.

Short term, it does look like the bounce from SPX 816 to 852 was over this morning on that overbought condition. Tuesday's low at 822 and monday's low at 816 now come into play. When they are taken out, the low at SPX 804 should be challenged next. Support is at 789, then 768 and 741. Still prefer the DOW count, as posted in the chart link below, versus the SPX count. It will take a rally over the SPX 848 pivot for this view to change. Today the rally made it back to that level, but it didn't hold. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bear market

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