SHORT TERM: techs lead market higher, DOW +150
Overnight the Asian markets were mostly higher. Europe opened higher and closed +4.40%. US index futures were higher overnight, and at 8:15 ADP reported monthly employment loses at -697K v -614K. Just before the open the Treasury Dept. released plans for its mortgage modification plan. At the open the SPX gapped up to 704, it closed at the pivot 696 yesterday. The rally continued for a few minutes to 711, then the market immediately started to pullback as GE traded under $6.00. At 10:00 ISM services reported a continuing contraction 41.6% v 42.9%. The FED released the following statement on the mortgage modification plan: http://www.federalreserve.gov/newsevents/press/bcreg/20090304a.htm. The SPX hit its low for the day at 700 shortly thereafter. Another rally followed to SPX 715 by noon, but the financials began to sell off and the market pulled back to 705 by 1:00. While the market awaited the release of the Beige book http://www.federalreserve.gov/fomc/beigebook/2009/20090304/default.htm at 2:00, it started to drift higher. After the release the market pushed to its best level of the day at SPX 724, getting back above the 717 pivot. Heading into the close the market pulled back sharply. At the close the SPX/DOW were +2.30%, and the NDX/NAZ were +2.60%. Bonds lost about 1/2 point, Crude rallied $3.50, Gold dropped $5.00, and the Euro was higher. Support for the SPX remains at 696 and then 644, with resistance at 717 and then 734. Short term momentum was slightly overbought at the highs of the day. Tomorrow, weekly Jobless claims at 8:30 along with Productivity and Unit labor costs. Then at 10:00 Factory orders, and testimony from FED vice chairman Kohn before the Senate. Friday is Non-farm payrolls!
After yesterday’s close right at the 696 pivot the futures market went to a deep discount. Overnight the SPX futures recovered as a strong 6% rally in China helped markets worldwide. At the open the market gapped up but was under selling pressure in the morning (GE and GOOG) and into early afternoon (KBE and XLF). When the market rallied to SPX 724 everything was moving higher. But heading into the close the financials pulled back again eroding some of the gains on the day. Thus far, the SPX has held the 680-725 fibonacci support zone we have been observing. The rally today off the 696 pivot was encouraging, especially being led by the techs. The NDX/NAZ have not made new bear market lows during this selloff and are displaying a positive derivative divergence. Since this is multi-month divergence it is more important than previous divergences during this bear market. While it’s too early to call yesterday’s low at SPX 692 the bottom, today’s action was encouraging. A rally and close above the 734 pivot would help the market gather some upside momentum. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bear market
the ELLIOTT WAVE lives on 
Every major bank in the US is now trading under $20.Looks like they all may be going by way of Citigroup.
LikeLike
Please treat my previous post as a noise…But about egold, I think he is great.
LikeLike
If market gaps down tomorrow with bad jobs report and starts rallying in first 30 min, it is time to buy Apr Call on XLF, RKH, KRE and SPY.
LikeLike
I just transferred 25% from Guranteed fund in 401K to S&P fund. My view, todays low may be closing bottom.
LikeLike
Nasdaq Composite missed a new low by 3 pts. NDX is holding up slightly better. Those are likely to join the SPX at some point, but an SPX gap down tomorrow with new COMPQ/NDX low seems too obvious. 680 to possibly 650ish was my scenario 2 target which is the completion of 5 of 3 of 5 down from 1576…or 5 of C down from 1008. In any case, there needs to be at least a 20% wave 4 retrace of 875 at some point since it hasn\’t happened yet. Currently, that would be 717+ near the downtrend line at 720ish mid-Monday. Doesn\’t mean we can\’t drop to 650 first and bounce to 695+. CPC and ISE sure aren\’t helping with the jobs report imminent. Ouch for bulls.
LikeLike
I\’m not sure I see the rationale for a bounce here. The bottom of the channel we\’ve been washing down like a sewer pipe is down around 660. The whole way down from 870 we\’ve had almost continues positive divergences. Bouncing like a dead cat. Tuesday looked like a much better location for the bounce so I expect we still need to test the bottom again like we did there.Still have my calls from Monday/Tuesday but flat after the single in-out this morning on the long side. Not feeling it.
LikeLike
Financials got hammered again today. Big reason market can\’t get a bid is because of financials.
LikeLike
Big positive divergences on charts. Market ignoring them. I get this feeling that we are going to snap to the upside real soon. Problem is that too many have that same feeling and are trading it accordingly.
LikeLike
>I am going to make experiments with MarketDepth too.Cool. Let us know what you find.
LikeLike
if I didn\’t have puts, I may take a little long..egold is good with his counts..
LikeLike