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thursday update

17 July 2008, 1:08 pm
by
tony of the ELLIOTT WAVE lives on

SHORT TERM: rally continues from tuesday's SPX 1200 low, DOW +207
Overnight most of the Asian markets were higher, Europe also opened higher and finished +2.25%. US index futures were relatively flat overnight, but started to rally after JPM reported their earnings early this morning. At 8:30 single family home starts declined 5.3% to a 17 year low. But new changes in data collection, politically motivated of course, showed housing starts up for the month. Weekly unemployment claims rose slightly, and still under 400,000. At the open the market rallied to 1259 near the resistance pivot, and then pulled back to 1241, right at the support pivot by 11:00. At 10:00 the Philly FED had reported that regional manufacturing continued to decline for the eighth straight month. From 11:00 on the market rallied as Crude continued to head lower. By 2:30 the SPX again challenged the 1261 pivot, by hitting 1262, and was turned away again. At 3:30 the market found support at 1253 and then moved higher into the close. For the day the SPX/DOW were +1.50%, and the NDX/NAZ were +0.85%. Bonds lost nearly one point, Crude dropped $4.50, Gold turned a $20 gain into a $4.50 loss, and the Euro was slightly higher. Support for the SPX remains at 1240 and then 1219, with resistance at 1261 and then 1287. Short term momentum reached overbought earlier amd closed just under that level. The near term indicators have turned sharply higher, indicating that a new uptrend may be underway. Should the pivot at 1240 continue to hold, we would expect about a 50% retracement of the entire downtrend over the next few weeks. Tomorrow options expiration. Best to your trading!
MEDIUM TERM: downtrend looks to have bottomed at SPX 1200
LONG TERM: bear market


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