TNX — Market Overflow

Market Report – 1.22.2012

January 22, 2012 By Market Overflow Leave a Comment

The past several weeks have been a slow grind higher for the S&P 500, and it seems that we have been stuck in a “hurry up and wait” market. The extended move higher is likely drawing in more and more long positions for the SPX, which is a case of traders being afraid of missing a move higher. When traders begin to pile in a certain trading position, typically the market will shake those traders out. Therefore, current levels are very dangerous for long positions as price action remains at a critical inflection point. We have two different wave counts for the SPX, and it seems both would suggest a move lower soon. A move lower would be in the form of the start of a larger move lower that would last several months, or it would be a smaller retracement setting up a continued move higher for the next several months.

The wave counts for several markets are not very clean, which likely means that we remain in corrective patterns. These scenarios are difficult for traders, and typically cause traders to lose trading capital due to a lack of a tradable trend. It makes a lot of sense to remain patient to wait for the higher probability trades. Trading is a game of “where are my probabilities the best or better”. Remember of course that the tendency for the markets is go higher, and on average the market goes higher. Also it is important to note that Chinese equities may have based out in the short-term at minimum for a move higher, which could support the S&P 500 and Crude Oil. The USD index continues to be a mess, and our conviction is to not buy the DX. We actually prefer selling the DX at current levels. Now to the charts.

Our current primary wave count for the SPX remains to be this first daily chart below. The abc correction higher has pushed above the critical 1306 level with a very important trend line resistance just above current levels. Currently the trend line comes in at about 1322-1324. The trend line extends lower all the way back from the 10.11.2007 high. A break above would be critical for the bulls and really hurt the bears. It is important to recognize that this move higher is becoming overextended and overbought, therefore it is due for a pullback at minimum. However, if this wave count is correct, once price action puts in a top we should see sharp price action lower very verry soon. If we don’t get the sharp price action lower very soon, then we must shift to our alternate wave count.

SPX Daily Candle chart

Here is a look at our alternate wave count for the SPX. It is a more bullish interpretation that expects more upside in the near term. The evidence across the markets is pushing us more and more to this interpretation, especially if we don’t get a sell-off very soon.

SPX Daily Candle chart

The TNX has failed to break below 18, which likely points to higher levels in the near term. We expect that price action may create an abcde triangle for wave iv over the next couple months.

TNX Daily Candle chart

Copper continues to look very choppy and may have higher levels ahead to complete the corrective wave (b).

HG Daily Candle chart

Crude oil has continued its holding pattern, but we believe a wave 3 break out to the upside is very near. This expectation is part of what has us leaning more and more towards a bullish SPX for the months ahead. Price action should find good support at the 98.37 and 97.35 levels, where we believe it’s a buy.

CL Daily Candle chart

The AUDUSD continues to be one of our favored wave counts that we have continued to track. We expect price action to complete wave (1) soon, and then retrace lower for wave (2). This wave count is very bullish for the AUDUSD, which likely means that the SPX is headed higher. We will be looking to enter a long position soon, if price action plays accordingly.

AUDUSD 4Hour Candle chart

Apple is pulling back for a buy opportunity soon, which is another bullish indicator for the markets.

AAPL 4Hour Candle chart

For more chart coverage and more in-depth research and analysis, join our premium members content. Also receive more interaction with Market Overflow as we provide Elliott Wave analysis and technical research to help your trading become more profitable. If you have any questions contact Ben, Founder and Chief Analyst, at marketoverflow@gmail.com, or contact us here. Try our free 7-day Premium content trial to experience our research and analysis service with trade recommendations. If your are interested in the **Free Premium Trial** contact us here.

Filed Under: Market Reports Tagged With: AAPL, AUDUSD, CL, HG, SPX, TNX

Market Report – 1.18.2012

January 18, 2012 By Market Overflow Leave a Comment

The following is a post of Premium content that has been made available to guests. This is an example of what our Premium members receive several times each day.

The SPX may have another push higher to complete many waves as indicated in the chart. We may be looking at a very important top. The rally seems to be on borrowed time, especially as we evaluated the entire market landscape.

SPX 1Hour Candle chart

The TNX gave back all of its early gains yesterday, which is a signal of a continued risk off tone for the market. With the “safe haven” buying of treasuries and the S&P 500 running out of gas yesterday, it seems that a major risk off move could come at any time and may be getting underway now. We see the TNX as making another move lower the 15 level at a minimum, which is what we have been forecasting for months now.

TNX 4Hour Candle chart

Copper has moved higher in corrective fashion and has hit up against some stiff resistance at 3.75. This could be the end of wave (iv) for another push lower, which would be bearish for the economy.

HG 4Hour Candle chart

Crude oil continues to flirt with a 2-month old trend line that has acted as support and resistance. If price action breaks down again through the supportive trend line, we may be seeing the beginning of a big move to the downside.

CL 4Hour Candle chart

A very important long-term trend line has capped the move higher for the AUDUSD, which prevent the “risk on” tone from advancing. A failure to break above would mean that we could see a very sizeable move to the downside develop soon.

AUDUSD 4Hour Candle chart

For more chart coverage and more in-depth research and analysis, join our premium members content. Also receive more interaction with Market Overflow as we provide Elliott Wave analysis and technical research to help your trading/investing become more profitable. If you have any questions contact Ben, Founder and Chief Analyst, at marketoverflow@gmail.com, or contact us here. We do have a free 7-day Premium content trial to try out research and analysis service with trade recommendations. If your are interested in the **Free Premium Trial** contact us here.

Filed Under: Market Reports Tagged With: AUDUSD, CL, HG, SPX, TNX

Market Report – 12.28.2011

December 28, 2011 By Market Overflow Leave a Comment

For more chart coverage and more in-depth research and analysis, join our premium members content. Also receive more interaction with Market Overflow as we provide Elliott Wave analysis and technical research to help your trading/investing become more profitable. If you have any questions contact Ben, Founder and Chief Analyst, at marketoverflow@gmail.com. We have recently set up a new **Free Premium Trial**. If you are interested contact us and we will provide a free 7-day Trial period.

The following is a post of Premium content that has been made available to guests. This is an example of what our Premium members receive several times each day.

At this point we continue to see the AUDUSD has potential to push to much higher levels in the weeks ahead. We have been pointing out today that there are several fib levels available that we are looking at for support, and it appears the 1.0050 level has held as support and price action has moved much higher off that level. If our wave count is correct this sets up a very bullish move in the near term. Price action was very oversold today as well.

AUDUSD 1Hour Candle chart

The SPX has dropped to the support area that we pointed out today in our premium members content. Price action has back tested the former trend line resistance at the 1249 level that has now become support. Sentiment has turned very bearish today, which may point to more gains ahead for the SPX. At this point we do not see much more downside price action ahead at this point, especially with the bullish AUDUSD setup and short-term bullish TNX setup below.

SPX 1Hour Candle chart

The TNX seems to be setting up for a possible push higher in the short-term, which should support equity price action and the AUDUSD.

TNX 4Hour Candle chart

Filed Under: Market Reports Tagged With: AUDUSD, SPX, TNX

Market Report – 12.21.2011

December 21, 2011 By Market Overflow Leave a Comment

For more chart coverage and more in-depth research and analysis, join our premium members content. Also receive more interaction with Market Overflow as we provide Elliott Wave analysis and technical research to help your trading/investing become more profitable. If you have any questions contact Ben, Founder and Chief Analyst, at marketoverflow@gmail.com. We have recently set up a new **Free Premium Trial**. If you are interested contact us and we will provide a free 7-day Trial period.

The low liquidity of pre-Holiday market conditions continue. We expect large market swings for price action through the rest of the year as the increased volatility gathers up stop orders from weak day traders. Caution is warranted and larger stop losses will be needed to trade effectively in these conditions. Join us in the Premium members content to get our full research/analysis and trade recommendations.

The ES appears to have completed a three wave move lower for wave b and we are now headed higher for the likely the rest of the year. Our initial target area is the 1303-1307 levels. A closer look at the chart below shows a possible completed minor wave 1 with a pullback to 1236 and 1228 fib levels, which would be excellent long entry points.

ES Hourly Candle chart

The DX has made an impressive move higher, which created the recent downward pressure on equities. We have been warning that a pull back for the DX was very near, and it appears that we are getting it now. We will focus on the 78.90 level as the near term target for the retracement. This move lower should help boost equity price action in the near term.

DX 4Hour Candle chart

The 10yr treasury yield is clearly bearish and likely headed lower to our 15 target level. A retracement higher will likely find resistance at the former trend line support that comes in at about 19.80.

TNX 4Hour Candle chart

Filed Under: Market Reports Tagged With: DX, ES, TNX

Market Report – Weekend Edition – 12.4.2011

December 4, 2011 By Market Overflow 2 Comments

If you haven’t had the chance to read our newsletter, you can here. Our bias to begin the week is for equity weakness, but that should only set up opportunities to position long for the weeks ahead. At this point we are expecting a rally for equities and risk related assets. Keep in mind though that China has consistently posted disappointing data and it appears that they are headed for a much slower economy for 2012. Some argue that it will be a soft landing, but it seems unlikely due to the larger global economic slowdown in the months ahead. We are expecting many more European countries to be downgraded that may continue to put pressure on equities next year. However, until 2012, we believe the path of least resistance is for equities to push higher into the end of 2011.

We have lots of charts (SPX, TNX, DX, HG, and GC) below, but many of them are only available to our Premium members. For more chart coverage and more in-depth analysis, join our premium members content. Also receive more interaction with Market Overflow as we provide technical research to help your trading/investing become more profitable. If you have any questions contact Ben, Founder and Chief Analyst, at marketoverflow@gmail.com.

Longer term the SPX monthly chart displays price action as likely headed much lower. Our wave count has labeled a completed five wave move higher at the end of 2007. Then the move lower was a corrective wave (a) and then a corrective wave (b) higher. It is difficult to see that (b) wave as anything other than corrective, because it does not have clear impulsive qualities. Therefore our expectation is for the equity rally to eventually run out of steam and drop pretty hard.

SPX Monthly Candle chart

The SPX daily candle chart shows our wave count of a wave a pushing higher in the days ahead, and likely this week.

SPX Daily Candle chart

A shorter term SPX 4 hour chart displays our expectation of a pullback to the 1236, 1221, and 1209 levels, which would be areas to position long. Specifically we would like to enter long positions at the 1221 and 1209 levels to fade the retracement. We are looking for a move to the 1277 level as an initial target.

SPX 4Hour Candle chart

The 10 year treasure yield appears to be continuing the correction higher for the next several weeks until year-end. This corrective move would likely complete our labeled wave iv to about the 24.26 and 26.52 levles. However, our bias remains bearish as we continue to target the 15 level and below for early next year.

TNX Daily Candle chart

The USD Index counts display a completed wave 2 with a wave 3 underway to the downside with much lower levels to come for the buck.

DX Daily Candle chart

A shorter term USD Index 4 hour chart shows a retracement pushing higher into fib resistance. Our initial target for price action to the downside is 75.88.

DX 4Hour Candle chart

*****
You need to be logged in to see this part of the post. Login using the box in the sidebar on the home page. Not registered? Click here to register
*****

Filed Under: Market Reports Tagged With: DX, GC, HG, SPX, TNX

Market Overflow – Newsletter – 12.4.2011

December 4, 2011 By Market Overflow 3 Comments

Market Overflow Newsletter

www.marketoverflow.com

Full Market Analysis

As of 12.4.2011

Our newsletter is another weekly update on the markets as a whole, which is a broad perspective on the core markets that helps us to better anticipate the next directions as they relate to each other.

In summary, the markets have received another shock of a coordinated central bank effort to increase liquidity around the world, so that failing banks could get increased access to US Dollars to pay their debts. However, to balance that news shock, there remains downgrade potential to Spain in the near term, as well as many other Eurozone countries. There also was news breaking last week that Conservatives were potentially creating a bill to prevent an IMF bailout of the Eurozone, which could help spark a “risk off” move. The news is definitely something to be aware of, but we believe the seasonal flows may continue to support equities as the risk of more intervention remains. Based on our research and analysis, we believe the USD has some room to fall and the SPX has room to run higher as the path of least resistance in the near term.

The charts that we have presented below display the potential for equities to move higher through year-end. However, our bias remains bearish risk once the move higher in equities completes its course, and we are likely to see a sizeable down year for equities in 2012. We must continue our discipline of intermarket analysis to help us identify these next moves, which we plan to capitalize on along the way. Our approach is “plan our trade, trade our plan”, which we encourage all of our members to focus on as we provide the research and analysis to guide our trades.

The increased volatility should continue in the weeks ahead. The larger trend continues to remain bearish as the longer term cycle will eventually create plenty of selling pressure. The SPX, EURUSD, Oil, and TNX have been moving together, which continues to be anticipated. Our longer term bearish bias for the SPX and bullish USD stance remains to be our conviction. With that bias longer term, our shorter term bias expects the markets to continue to follow their correlations as we believe the USD moves lower and the SPX moves higher. For the last several months we have been suggesting that the markets could make a major shift in the weeks ahead that could have a large impact for the medium and long-term. Although we are bullish risk for the shorter term, we maintain that the past couple years have been nothing but a bear market rally in the larger economy and specifically equities.

We want to highlight a few charts for the SPX and TNX. Both are suggesting that “risk on” is likely to continue for the next several weeks. The SPX daily chart displays a completed (a) then (b) wave move, and currently price action is pushing higher for a wave (c) and completion of wave (ii). The SPX shows a breakdown of that price action with an hourly chart. The TNX daily chart displays a completed wave (iii) lower with an abc correction currently retracing higher.

For a full analysis, join our Premium service. Details are here. Sign up is here.

Newsletter Archives