A Weak Bounce

 In the very brief time I have researched the Elder impulse system (one of these days I am going to do some historical research), the first red bar has been a very reliable sell signal, and had you sold after the first one, you would have escaped yesterday's carnage, and had you gone short, you would be sitting on a small profit right now. I was waiting for a bounce today to see how strong it would be, and it wasn't very strong. However, the bulls can make the case that we have held support at 1073, which is exactly the mirror image of the thrust from 1200 to 1227, assuming 1200 is a pivot point.We are mere ticks above the 50dema (slightly higher than the simple average), and if we get another big down thrust tomorrow, we might be looking at a date with the 200. that is quite a drop from here, but it is also a perfect launching pad for another move up in a bull market, that is, if we are in one.

The Nasdaq is losing it's leadership status, and is pretty much following the SPX right now. The leaders here really aren't leading right now, but they are not getting shellacked  either (leaving out the solar stocks). This is where we are going to separate the cream from the crap in the "cloud computing" hype.

The Russell 2000 is doing the same dance with the moving averages, but is noticeably weaker. The range defined by the recent high and low does not line up with chart support here, so I don't expect it to hold much.

TNX, the yield on the 10 year Treasury, is on a buy signal (at this stage more a "hold"), but yesterday's sharp reversal was pretty staggering. It is interesting that the resistance level was nearly equal distance from the pivot at 28.27 as the prior resistance level at 27.20. It is also intersting that it quickly got back above the pivot after it broke through it this morning.

Crude oil has given back in 4 days what it took nearly 2 months to get. Now we will see how strong the support at 79 is, or whether we will revert back to the old 70-80 range. It seems Bernanke's attempts to castrate the dollar are backfiring, at least in the short term.

Bernanke's dream of inflation fueled growth is running into a snag as Europe again goes into crisis, and the dollar becomes the haven of last resort once again. If that is the case, all the helicopter drops he can muster will stop the deflationary cycle.

I will have the new highs update shortly.