Last week saw some fairly dramatic moves on the S&P 500 in the form of a "bear trap" brought on by the well-advertised Head and Shoulders top. We could almost "smell that one" coming....
The rebound from the 1000 area has been very impressive and seems like only the first leg of larger rebound. Because of the way the waves have developed from the highs, it's impossible to know the "count" with any sort of certainty. If one were to put a gun to my head, I would suggest Slide 3 as my leading candidate--a move to the 1150-1180 zone. Even with that though, I will still remain 20-30% short this market because the longer term trend does seem lower now and I have little confidence in the short term wave models. For instance, slides 4 and 5 demonstrate other viable alternatives that reach very different conclusions.
Bottom line on the S&P: Use 1054 and 1080 on the September futures as near term support and resistance. Breaks of those levels should trigger bigger moves in the direction of the break.
The Dollar Index seems headed lower over the next few weeks. We may get a little rebound back to 85 to retest the broken neckline, but a move down to the 81.50-82.80 zone seems "in the cards." I still remain 20% long the DXY index, even though it seems likely we'll see lower levels in the near term. The bigger picture is simply too bullish not to be marginally involved on the long side.
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Brief World Cup thoughts:
Wow. Whoever doesn't think "football" is a physical support needs to watch that Finals again. That was a brutally intense game. I was rooting for the Dutch because I'm just not a big fan of the controlled Spanish game. That said, the Spanish deserved to win that one. The Dutch blew their chances and then got caught a man short at the end as a result of their thuggish play. So it goes.
Would love to be in Madrid or Barcelona tonight. Though, I'd happily take a night in Amsterdam even as the losing side....
16 comments:
@AT
Well... At least that's good news for Doug Kass...
CLEARLY - He won't get the FISH EYE for any summer parties in the Hamptons...
Cin Cin Doug-a-doodle...
What a brutal World Cup final. Very aggressive.
BTW - If anyone is interested, CV has decided to change the slogan (from the one that I "penned" back in January)...
It's up there on the top (for onlookers to see)...
I hereby RELEGATE the OLD SLOGAN to the Salvation Army (or anyone else in need)...
Ok hopefully the wireless problem has been resolved (aka switched to clear.com). Had to update OS from 10.4 to 10.6 to get modem to work (figures). All day picnic yesterday and I'm still recovering. So what did I miss?
1150-1180?
I'm thinking no way on those prices, but hey, I can't argue with the count, certainly valid. I really have no idea how the rest of this month is going to go. So much for those lazy days of summer!
3lb (monthly)...
Keep it in mind...
one thing that might support a count that high is the Dow Theory non-confirmation. I've actually seen some people say that there was a Dow-Theory sell signal but Richard Russell disagrees and I consider him to be the authority on the topic.
Personally I find sentiment to be a mixed bag on a number of levels. Maybe we can get into that this week.
Low volume?
great time to get to anything if one happens to have a lot of cash/ink...
Greetings all. What did I miss last week? Anything consequential? ;-)
McFear:
Yeah, when I start going through counts and then see something that makes me say: "No fucking way...." Well, those counts sometimes end up coming true. The short term count is very, very difficult. Nothing would surprise me.
Mannwich,
You only missed about 1200 comments last week.
In fact, your name came up once or twice (in a good way, of course).
@DL: LOL. Oh, is that all? I was out of town last week. Tough to stay plugged into the markets and blogosphere. Not a bad thing once in a while.
AT,
On the dollar chart, so (A) = (C) would be ~100 or so....very interesting
Your current corrective count on it somewhat matches EWI in target despite being a different count.
Thanks, AT!
OT: Whitesnake's "Still of the Night" is the greatest hair-band ballad of all time. Coverdale is ridiculous, and the lyrics are generally ridiculous, but portions of that tune are positively sublime. Will we ever know the identity of the ghostwriter who orchestrated that brilliant interlude, sandwiched between two slices of pablum?
http://www.youtube.com/watch?v=1-Isl_KX2WQ
Welcome back Manny.
Great report AT
NEW THREAD
Welcome back Manny... Now turn around & pack your bags again (so we don't hit those numbers Andy's "hinting" at)... :-)
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