best of financial blogs online trading

Tony of the ELLIOTT WAVE lives on Mar 27, 2008 Email this article to a Friend  Printer friendly page

Overnight the Asian markets were all lower except Hong Kong. Europe came in +1.50%, and closed +1.20%. US index futures were lower overnight, but rallied this morning after the final revision for 4Q GDP was announced at +0.6%. Also the weekly unemployment figures were a bit better than expected, and there was a speech by FED governor Kroszner regarding protecting and sustaining home ownership: http://www.federalreserve.gov/newsevents/speech/kroszner20080327a.htm.

At the open stocks were modestly higher, but quickly retreated to 1330 by 10:30. After getting a bit oversold and close to the 1327 EW pivot, the market rallied without any leadership. It looked all technical. By 1:00 the SPX made its high for the day at 1346, then rolled over to 1332 by 2:00. The choppiness continued as the SPX rallied to 1342 by 3:00, and then made new lows for the day heading into the close. At the close the SPX/DOW were -1.05%, and the NDX/NAZ were -2.0%. Bonds lost about 1/4 point, Crude was up $1.25, Gold was off 50 cents, and the Euro was lower.

Support for the SPX now notches down to 1316 and then 1287, with resistance at 1327 and then 1344. Short term momentum was oversold at the close. Tomorrow before the open the February core PCE price index will be reported, a key inflation indicator.

The near term indicators were overbought at monday's high of 1360. Since then, they have been easing back as the market has worked its way lower one EW pivot at a time. It may take a test of the pivot at 1316 to get these indicators oversold again. Thus far from the 1257 low, the market appears to have done an abc up, and a choppy abc on the way down as well. It all looks correctional. If SPX 1316 holds, expecting the rally to resume to 1383. Best to your trading!

MEDIUM TERM: rally looking for support

LONG TERM: bear market

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

       

by Tony (the ELLIOTT WAVE lives on)

Disclaimer:

Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests.

Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk.

There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital.