4:00pm
Stay tuned for today’s video.
3:38pm
S&P Index drops under $1000 for the first time since Oct 2003.
3:44pm
S&P under yesterday’s low. As is the NASDAQ.
3:28pm
SPX nearing yesterday’s low.
3:02pm
Pullback still on light volume but slowly rolling over. Approaching session lows.
3:00pm
August Consumer Credit: -$7.9B v +$5Be (first drop since 1998)
2:54pm
Pullback from 20MA on light volume. Looks to be consolidating before a push higher.
2:40pm
ES finding some resistance at 20MA:
2:20pm
Markets off their worst levels, attempting to reverse. Volume substantial. This could be the beginning of Wave c:
2:00pm
Minutes of the Sept 16 FOMC meeting: Policy makers leaning towards rate cut. Saw diminished risks to inflation. Falling home prices restraining consumer spending; restraint may require policy response; home price decline may slow.
1:54pm
Some buying coming into the markets on this latest announcement out of the UK. 2pm reversal?
1:51pm
BBC: UK Gov’t preparing to announce a rescue package for banking sector.
~ Plan to include injection of capital into banks and provide for a standby facility.
WSJ:
1:46pm
The market has been overwhelmed by sellers all day. There is no buyer enthusiasm. Minutes of the Sept 16 FOMC meeting to be released at 2pm. I’m not expecting much reaction. Sellers in control.
1:28pm
MS weakness (-24%) being attributed to rumors Mitsubishi is considering pulling out of purchase deal.
1:18pm
Retracements greater than 61.8% are vulnerable to failure. If we break below 1032, staying long is very risky. Market is oversold and Elliot Wave Analysis called for a move higher, but the only truth is price and this action is not bullish.
1:07pm
Bernanke comments are out (released early):
- All tools will be utilized to help stability. Will consider whether current monetary policy is appropriate.
- Remarks that commodity prices show extraordinary volatility, inflation outlook has improved somewhat.
- Notes that market turmoil and weak data will exhibit US growth outlook worsening, and downside risks are increasing.
- Fed will begin using reserve interest powers this week.
1:05pm
I’m still betting on a Bernanke bounce but this market is not showing any signs of rallying yet. Low volume on buy candles.
12:52pm
Market pulling back further than I anticipated. SPX has retraced 61.8% (1032.50) of the move, a common retracement. If this level gives way, I’ll be forced to cover my long position.
12:40pm
ES threatening to break support. Needs to confrim break.
12:30pm
VIX steady near 48. Intraday double bottom on ES, also 50% retracement on SPX:
12:04pm
TED spread continues to improve, now 333 bps.
11:37am
Maintaining upside bias. Perhaps a rally may coincide with Bernanke’s speech at 1:15pm. Regardless of what he says, it could serve as a catalyst.
11:00am
Forgot to mention, the TED spread has improved today, now at 342 bps. Much improvement from yesterday’s highs above 390 bps. At least its moving in the right direction. This supports a potential rally.
~ Hardly important to US markets but interesting… Denmark just unexpectedly raised interest rates.
10:25am
Here’s an ES 10-minute since the bounce began. Action looks healthy. Consolidating after the move higher, perhaps preparing for another run. If the support line breaks, look out below.
10:21am
Thanks to DanEric40 for is help with the Elliot Wave Analysis. What if this weakness is the B wave?
10:12am
I’m looking at a potential bearish MA pattern on the ES 10-minute. Not impressed with the buying volume this morning. Still holding calls. **UPDATE** 10:48am: Pattern is sloppy. I don’t think it will play out.
9:46am
What I’m watching. SPX 1-minute:
9:31am
VIX opens under 50, at 49.21
Dollar continues to weaken.
9:19am
Crude has rallied in recent minutes on a news report that a US war plane violated Iranian airspace and was forced to land. The Pentagon said they are not aware of any aircraft being forced to land. (Just what this market needs!)
9:15am
Here is a 1-minute chart of the SPX. Not the ABC corrective pattern. If A = C, the price target for this move is 1080. Of course, C may extend further than A.
8:57am
ES is volatile pre-market. Recently fell from 1073 to 1045. In the last few minutes, the ES has rallied 20 points on an announcement the Fed will buy US commercial paper through a special unit.
~ Gold is higher above $880
~ Crude is higher above $91
~ The dollar is weak, retracing nearly all of yesterday’s gains
1:52am
Good morning! Who can sleep in this market? And you guys wonder why my first commentary post is at 9:45am…
Looking at the charts now, I see the dollar retracing a majority of yesterday’s gains and crude is catching a bid, back above $90. The ES contract is higher by 15 points to 1068.25. This will likely all be different by the time I wake up.
There’s a lot of news and central bank action overnight, but I can’t be distracted. I don’t want StockTock to become a news service. The charts have proven their worth and I prefer to focus on them. Of course, I will report relevant, market-moving news as it occurs.
Here’s my latest Elliot Wave Analysis for SPX:
Thanks to everyone who has been contributing their ideas and content on StockTock Social. Our vision for STS is to make it a Facebook-like destination for traders to share ideas and learn from each other. It will be as great as its members decide to make it. Tell your friends and contribute as much as you can! High quality content may be featured on the StockTock front page. I have already learned a ton by the contributions so far. Keep it up!
I will not be participating in the live chat on STS. So if you have any questions for me throughout the day, be sure to post your question here in the Intraday Commentary. That way, your question won’t be missed and others can see my response, which could get lost in the chatroom.
Hey Craig you have ability to see waveforms in pre and post market. They also matter in the scheme of things. Afterall, we do more volume in pre/post market then they did in entire market back during the depression.
Looks like premarket is tracing some kind of flat/triangle I was talking about. We may break hard to new lows today right after open. The waves are playing out very swiftly now so perhaps your original rectangle box with wave 4 target will come into play. (with premarket in mind)
It is a very fluid situation and these powerful wave scan unfold in any way they please as far as timing/retrace amounts, etc. Afterall, John Q Public is very scared. They are likely putting in massive sell orders on 401Ks etc.
Just something to keep in mind. Premarket waveforms matter. And it looks like premarket peaked at 1077 area? That means maybe the retrace target was met.
We may hit a new low today. Of course we may not. Hows that for analysis?
Bottom line: be ready to bail on any longs. I sold my SSO premarket.
Massive sell orders on 401k are happening. They are changing borker dealers and those that don’t map out to new bd’s they are going to cash. All my clients are in cash except for well balanced portfolios that have been in existnce for some time. Anything purchased in the past 5 years is sold and in cash (Mutual funds and equities). I must say that I started selling off around 12,000 on the DOW and completed selling (final 15% or so) last friday. Bloomberg reported tis AM that many advisors being fired. I’ve picked up close to $2mn and have not been aggressively seeking it (yet). Is capitulation happening, well if i am seling that is a sign of the bottom because I have horrible timing and my most equity averse clients are calling and telling me to buy. This is a signal to me we’re getting calose.
Great work Dan, really glad you are here to share with us.
Glad you can share that perspective, Shanky. Helps capture the psychological mood. Keep us posted.
Shanky,
I chat with my broker almost on a daily basis. He told me that yesterday he got several panic calls and one woman was crying on the phone. Very few of his client accounts made money in 2008. While some of his clients are yet to capitulate and many of his colleagues’ clients have.
One area of capitulation he is still waiting to see is high-networth managed accounts.
For what its worth.
Dan low hanging fruit picked on short trade so holding a little aapl at 92….will watch for C
It could also just be part of the retrace correctives playing out. We still have a chance to head back toward 1100, but I am not betting anything that we do.
We are in a big air pocket in the market. We broke through 2004? support and 2003 is weak support. Check out the long term support lines. Maybe 2004 support lines become resistance area. I dont have time got to run at work. With no short covering for 800 stocks, I see no elevator ride up like last time.
I think we may see my target of 1105. The market will make this feel like a bottom is in, tricking many traders into getting long right before a reversal. But I agree this is not the time to be greedy on the long side. This is a counter-trend trade and therefore, should be traded conservatively.
Looks like the fed helped today’s social mood in the nick of time! LOL oh well I made a profit!
Hi Craig,
What is your strategy for today ? If you did not have a position, what point would you take a long SSO position ? or planning to stay on sidelines ? I am thinking if we trace back to that 1045 level, a small position in SSO would not be a bad idea.
I’m holding SPY calls that I’m looking to cover this morning on a rally between 1080 and 1105, hopefully 1105 if I can manage it properly and the market cooperates. Then, I’ll be on the sidelines looking for signs of a reversal lower to complete wave iv and begin wave v, that will likely take the market to new lows.
LOL, remember when an SPX move of 25 points was considered a good day? We seem to move that far in 20 minutes anymore.
If you want to know where the market goes, keep EUR/JPY on your screen today. It trades tick for tick with S&P futures. Just look at daily charts, or even 5 minute chart of both.
Pete
Interesting… Thanks Pete. Can you explain that relationship?
It’s something foreign exchange traders have know for years. Heck I thought everybody knew that. Anyways it has to do with risk aversion. When ES goes up (day or night) they buy EUR/JPY and when ES sells off they sell EUR/JPY. Just look last night as ES and EUR/JPY and you’ll see the moves.
There are times throughout the year where it does not work, but now it seems to be working, so keep it on your screen to give you an edge.
Pete
Craig,
I’ve known guys who have sat on trading desks in NY. All they do is watch ES and when it goes up they buy EUR/JPY and USD/JPY in blocks of 20 MIO USD each time, and when ES goes down they sell EUR/JPY and USD/JPY.
When this relationship breaks down you’ll know it cause you will be able to see it”s not working. Now it seems to be working.
Pete
It could be that the dollar has finished its 5 wave move up from march lows. Remains to be seen, but all the momentum indicators are displaying negative divergences. As I said my target my limit was 82, we hit 81 and change on the index.
This market weakness back down may be the B wave of a simple zig-zag corrective playing out.
I would think the market will continue to move up after finding its “B”, it is still oversold in a lot of ways.
But we shall see
Craig thats nice that you can do the e minis like that. It definately gives the bigger picture. i’m gonna have to get your charting service and get something in real time.
Whats your thoughts on market oversold conditions? Long term charts shows we have room to run lower which support the therory of 925 SPX easily. I have not much experience on short terms charts though.
I’m in the 925 camp with you. Oversold conditions and bullish divergences have not worked throughout this bear market.
XLF nearing it’s Jul 15 close of 17.17. I believe a positive test of this number could signal a short term buying opp. Eerily similar bottoming candle yesterday as compared to Jul 15 as well. BAC div cut another expected event, but was it priced into the market? Looking for a fed anouncement to help move XLF. I know this is not technical, but it seems the timeing is there. I’m long at 17.76.
MACD divergence exists as well. Spread between 12 and 26 has gotten too big and should correct – now which way it corrects is anyone’s guess, but I’m guessing up. Forgot to mention XLF about to touch bottom trend line.
Any thoughts?
I bought some shares and calls of AAPL. I expect to be out of calls this week when Craig’s target of S&P 1100-1105 materializes.
lots of calls were bought yesterday on aapl at the OCT 120 level
Hmm. That is interesting. They will report earnings on Oct 21, after Oct options expire..
One thing about B waves in a bear market, if you dont recognize it as a b wave and your a permabear like me, itys easy to get sucked back in trying to short the market. Then the C wave comes and WHAM your blown out of your short position with losses. How many people have had that happen? I learned the hard way LOL
Just like longs get sucked in wave 2, 4 and A nd C
Violatility in this market is insane. I’ve had 20% winners and losers getting sucked into the vortex. You stand on the event horizon and wham you get particalized. Been there done that.
Craig,
Bull Flag on the 15min. SPY 1 day chart?
Could be. I like this action so far. Looks like consolidation before a move higher. Have not seen any buying volume though…
Yeah i was just thinking the same thing
Thanks guys,
Got in at 40.34 on the SSO
Hi Deaneric and Craig,
Do you see contracting triangle on 1min chart, possibly to the upside from yesterday’s reversal?
Yea, I see that. I favor an upside break.
more like a flag pennant.. still very bullish though cause it’s holding quite nicely..
TED is at 3.42
Thanks John. Important observation.
Excellent summary Michael!
When you are a glass half full guy like me that believes in the US and its strength, it is hard to stay the course of the downward trend. Every bit of news i want the market to finally turn, but got to stay the course. Many more banks to fail, RE market and credit still in shambles (my brother in law has sold 2 houses in 2 months and they usually sell about 200 per year in ATL). Car dealerships are shutting down. Unemployment numbers will get worse. More dividend cuts to come. This is far from over – it is just hard to stay committed to the downside. Even our fearless leader wanted to call a bottom. Craig made the call many weeks back when he first introduced the EW. I just could not commit. We’re very lucky to be here at Stocktock.
The more charts i look at it seems we’re in the bubble Dan described. Kind of a no man’s land technically. Like I said yesterday, we’re have ing to start to look back years instaed of months and weeks for sound tech levels – and those don’t look good.
Well said. I have been incredibly bearish for some time, but I too don’t feel comfortable staying short at these levels. I am dying for that wave 4 rally that I can short into.
Yes I agree Shanky. We are in a freefall zone so expected retraces can be limited. Just enough to shake out any exteme short term oversold and then more down trend. The market is looking for support. It has some in the 900′s.
MY LMT it its retrace so i am happy I got a short in if we tank today. If we don’t, then I’ll add later today.
I did short LMT at $104.58 today. It just impulsed downward. Interesting.
The SPX touched into 2004 support earlier (former support) and now it may be resistance. It was a long strong band of support and it will take a good effort to break back above it.
The next solid support that I see is at the 1009 mark from a small ledge in 2003. Thats where the market was yesterday of course.
Not saying it cant break back above, just that its going to take a strong effort to break that 1065-1075 zone or thereabouts.
Going long with UNG @30.42.
20/50 ma are flattening out, $30 defended well, cold winter coming, USD weakening on coming rate cuts, this is a bottoming process.
Stop loss, a closed below $30 (not intra-day low).
About the Danish interest rate hike
The official explanation is this:
Since mid-September there has been an increase in ECB’s marginal rate. This has reduced the spread between Danmarks Nationalbank’s lending rate and ECB’s marginal rate. Recently the interest-rate spread has been negative, which has led to an outflow of foreign-exchange.
Danmarks Nationalbank has intervened in the foreign-exchange market to support the krone. The intervention has now reached a point which leads to Danmarks Nationalbank’s increase of the lending rate. The size of the change in the interest rate reflects the need to re-establish a positive interest-rate spread.
However, the Danish economy has come to an abrupt halt. Their housing bubble has been the largest of the Nordic countries, therefore the effects has been more severe too. More noticeable is that Sweden has tried to defend its currency in the beginning of the 90`s, and it lead to complete collapse of the economy. I guess that it’s true what they say…”Those who do not learn from history have an exiting chance to repeat it”
Yes, and one more thing…The danish krona has a fixed price against euro…I’m not shore about terminology, but I think you say it’s pegged.
‘~ Hardly important to US markets but interesting… Denmark just unexpectedly raised interest rates.’
-If this is true, this is a short term minus, but a long term plus for the dollar. If Europe can’t collectively fall in line about where interest rates in the EU should be, more monies will gravitate to USD. That’s an example relating to your article about the Euro and confidence in its future.
Once again EUR/JPY heading lower with ES. Amazing how that one works huh?
Hi Craig! I follow your videos and daily commentary and find it very useful for me trying to deepen my understanding of the markets through TA. You wrote at 10:12 about a “bearish MA pattern”. Can you pls explain or refer me to a place where I can read more about this. Is it related to Eliiot Wave?
Many thanks for your help!
Per in London
Per go to this link to learn more about technical analysis
http://stockcharts.com/school/doku.php?id=chart_school
Read up there and watch and learn here. Elliot Wave info is tough to find without paying for it. This site is an incredible free resource. Go here for EW and research from there – http://www.elliottwave.com/
Here is another good EW explanation –
http://stockcharts.com/school/doku.php?id=chart_school:market_analysis:elliott_wave_theory
Craig
are you still in your long position?
Pullback at 61.8% retracement. If that gives way, I am out.
Craig – I have a silly question… Why, for so many days I watch your intra-day posts and comments, I very often see, you play “against the trend”. You are trying to pick bottom… Especially today, and yestarday. Yes, that’s true, at some point you will get a bounce, yesterday it happened at the end of day, maybe today you will be lucky too… But wouldn’t it be just easier or “in-trend” to play short both days, until downtrend breaks, and then get out?
I try to play both sides. Have not had good execution on my short entries so I have missed some of the moves. But bear market bounces are good plays, as long as you have discipline.
FSLR has head and shoulders pattern over the past 2 days including after hours trading. could break even lower.
Craig – To me it looks like today we completed a near perfect 5 wave cycle today. Am i correct? If so, a test of the 1032 level on the S&P will hopefully produce a turnaround to 1060? I may be way off base and am now seeing waves in my sleep. Let me know if I am on track.
OK – I was wrong – thanks Ben Bernanke for that fine speach that did a lot for all of us. Keep up the good work!
Craig, How is your discipline holding out today?
Covered SPY calls when the SPX broke 61.8% retracement. Not a great day.
We will try again Tomorrow.
XLF finaaly took out July 15 lows…
Cramer will not be happy. He said bottom was in for financials…
LOL I started a modest position in UYG…we will see if it is a bad play or not.
Be very careful everyone. SKF is getting back into “government intervention” territory again. I’m on the sidelines and as long as this remains a (news/government intervention) driven market, I’m gonna stay there.
Gigantic flat playing out? We didn’t make a new low, so perhaps we head back to 1265 area before a collapse lower tomorrow or Thursday?
Like the ones I described.
hehe I mean 1065!
Craig,
If this is the beginning of wave C, how far do you think ES will go over the next week?
Thanks,
Pete
If a=c, then about 1075/1080
10/75/1080 on the SPX. ES trading about 4 points above SPX, so 1079/1084. Double top level.
VIX closed this am gap …could be bullish for the markets
It might be a flat playing out Craig. draw a couple of trendlines that contract toward each other. I have one on my stockchart site on “dropoff from bailout vote”
That means it falls short. These corrective waves have mostly been flats these past 5 weeks. and they don’t take out the “A” wave high.
I would think a corrective wave after a 5-wave structure down should produce more than a weak flat pattern.
That’s not very optomistic for the longs considering we were as high as 1078 overnight. Obviously it’s better to wait for the rally and sell into it since that the trend.
good luck,
Pete
gold is looking like it is about to get a spanking very soon.
If you want to take a punt on gold, I believe a good idea would be to sell here ($887) and leave a stop just above $900. Seems to be a good risk reward scenario.
I am waiting for the stockchastics on DZZ to turn up right, there is still some time left. We watch
Good luck. I forgot to mention the take profit on the short gold position should be around $820. That’s what I meant by good risk reward. $820 would be a good place to take profit (I think you’ll see it again) , if you’re not stopped out first at $900.
Pete
consumer credit in just a few minutes
Hey,
What is going on with the airlines?
They are getting destroyed yesterday and today.
Especially: UAUA and LCC.
If we don’t break today’s low substantially, we may have formed a successful double bottom . The pullback on 20 ma has been on low volume. At this level, it is very difficult to short the market. Some of the famous Wall street bears (Todd harrison, Carter worth) appear to be bullish short-term. Any thoughts ?
“2:54pm Pullback from 20MA on light volume. Looks to be consolidating before a push higher.”
I would not count on it… I just bought SSO, and I am contrarian indicator
Just wanted to let you know – your elliott wave figure at 2:20 doesn’t look is ok by the rules, but it is hard to be convincing about, since it had quite a few “guidelines” missing. Guidelines are not steadfast rules but occur most of the times. Your figure violates these two -
1) Wave c, should ideally end at the (4) of the one lesser degree
2) Ideally wave 2 and 4 are never both a,b,c zigzags.
Mav, do you have a EWT chart you can post? I am questioning my wave count with this weakness. If we hold the lows, wave iv may still play out.
Got out of my Apple calls for big % loss. Still holding the stock.
Also sold my 1/2 position in AAPL
‘August Consumer Credit: -$7.9B v +$5Be (first drop since 1998)
- I saw that, and it’s up for wide interpretation. It could mean no new credit for Main Street, or that people are paying down their outstanding debts rather than investing.
Maybe both of those possibilities are good in the long run?
If it’s number 2 (paying down debts rather than investing) – That means there is rampant fear at this moment greater than at any point since 1998. If someone chooses to use that as a contrarian indicator, then this equals opportunity.
Looks like absolutely no liquidity in this market.
There are tons of cash out there…this is a crisis of confidence and transparency. Until the Fed stop feeding the market with more and more money…this is going to get worse. We need new banks with clean balance-sheets to start lending…Let’s let these private banks do their jobs instead of shoving cash to C, GS, BAC. No is willing to lend to these banks…NO ONE, except the FED with our tax money!!!
Did you notice that they finally stopped believing earnings numbers form banks. BAC got crushed after earnings. It is a long overdue reaction for their July ‘beat’ the number game.
There is no good news any more. Stocks are still going down on bad news and that is BAD….
I hope we get a video tonight. This market is playing games with our Elliott Wave Theory.
There will be a video tonight.
My flsr worked perfectly. H&S pattern failes an hour later and dropped from 140 to 128.
Funny how experts are blaming Greenspan for this bubble because of lower rates, and now the same experts are screaming for lower rates – NOW!
“Damn it, Ben…lower the rate NOW”
Something I would be interested in. Stocks over $100 in beginning of 2008 vs Stocks over $100 now. Seems like any stock over 100 is getting hammered.