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wednesday update

20 August 2008, 1:11 pm
by
tony of the ELLIOTT WAVE lives on

SHORT TERM: market closes higher while FNM/FRE melt down, DOW +69
Overnight the Asian markets were mostly higher, and Europe opened higher while closing +0.75%. Stocks opened slightly higher to 1270, but quickly sold off to the 1261 pivot by 10:00. That was the low for the day. An oversold rally followed to 1276 by 11:00, the high for the day. When FNM/FRE started to make new bear market lows, the market headed lower. Despite $5 trillion in guarantees, FMN/FRE are now selling at a lower market cap than the largest truly public mortgage lender Washington Mutual. The market certainly thinks these two GSE's will be nationalized. By 2:30 the SPX made a slightly higher low at 1263, then moved higher into the close. For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.25%. Bonds were up about twelve ticks, Crude added 95 cents, Gold gained $3.50, and the Euro was lower. Support for the SPX remains at 1261 and then 1240, with resistance at 1287 and then 1316. Short term momentum was oversold this morning, bounced above neutral during the early rally, then settled above neutral. The near term indicators edged up a bit. Tomorrow the weekly unemployment report at 8:30 is followed by the Philly FED and leading indicators at 10:00.  Still no short term confirm on the SPX, but did post a tentative "green" labeling of 1-2-3-4 down from the 1313 high on the hourly chart. Best to your trading!
MEDIUM TERM: uptrend high at SPX 1313
LONG TERM: bear market


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