The markets were heavy and sold down all day. MSFT issued an earnings warning after the close. (Maybe the rumor was leaked early). While MSFT's big miss will certainly have a negative influence, the situation is a pretty good setup for a reversal. ORCL's earnings report was better than expectations. At some point the bad news is factored into the market. The Model portfolio suggests spending 20% of available cash to purchase stocks on morning weakness. The perfect time for a low would be 10:15 AM CST on Friday morning. There is danger of a market plunge since the indices are dangerously close to the November 30 lows. Any long positions should have exit strategies, in case of a surprise plunge through the 11/30 lows. The timing work on this page suggests a turn tomorrow and a rally into the the beginning of January, before there is another leg down in the general markets.
The 60 minute SPX is posted below. The December 7 low to the December 11 high projects to Friday, December 15 at 10:15 AM CST.
the nasdaq is now 10:45.....spx still 10:15
Bear in mind that there is still downside risk. Since we plowed through 2602 on NASDAQ two weeks ago, the NASDAQ Weekly shows a lower downside target at 2271. We don't necessarily need to touch the lower level in the near term. A multi-week rally is likely to occur first, before the lower target is achieved in March 2001
To remain friendly to Nasdaq, it needs to hold above 2610. If that level is violated, the November low will be impossible to defend. As long as we hold above 2610, that would appear to be the “B” of an “ABC” wave “4” Elliot wave. The November 30 low is very important.
The SPX daily chart is posted below. The 1330 level must hold the current decline for us to stay friendly to this index through the end of the year. The November 30 lows are very important. The October 18 lows at just above 1300 were violated on November 30, which opens the door to a lower move after a bear market rally completes. The current (smallest) wave projects to 1287 on the downside, which was satisfied two weeks ago. That is an important support level in the very short term. The Oct. 18 to Nov. 6 wave projects to 1224, which is very close to the SPX weekly chart projection of 1221. It is more probable that these lower targets are seen in March 2001. |
