Equities Give Back Gains Off Highs on Holiday Close

The major indexes moved up on this thanksgiving week to make new highs only to give it back and close down in the last hour of trading. The S&P hit 1815 to complete fifth waves at subminuette degree to conclude minuette three and begin its fourth wave. Likewise, the Dow appears to be turning down now after making its all-time high also at 16182 and retreating to 16114. Fifth wave counts at minuette degree are complete and should confirm the moves down on the other indexes. The NAS’s high came in at 4071; however, it did not close down for the day barely positing a closing high of the lows. Fifth wave counts are complete there too and the index should be heading south along with the other major indexes in the first couple of weeks in December before they all head up for one more push to compete fifth wave targets at primary degree. Transportation is a bit harder to count and appears to be finishing off wave three of an ending diagonal at subminuette degree. Wave four should be on its way now. The index made its new high at 7273 and also sold off to close down. From there, it should carve out a short wave ending diagonal four and then finish off its fifth to complete the diagonal and then head down for a wave four at minute degree. Bear in mind that this ending diagonal is lagging the major indexes a bit but that there is an alternate count with an ending diagonal that is complete now. The reason it is an alternate is because its wave one is too long proportionately for the move. However, if it turns south now, it will strengthen the near term upside targets at completion zones for the primary move down. Utilities moved up today and closed for a small gain near the low. As mentioned in my last blog, the move down from the 510 near-term Nov 7th high is very impulsive and counts as it is in a three of three at subminuette degree. Once again, if the index moves past the 476 it will be a bad omen to add to the rest of the bearish news. Sentiment indicators are at turning point extremes where ever you look.

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The dollar index moved up today in five waves on the hourly off of the retracement bottom from the Nov 27th high which completed a zigzag at 80.48 on Nov 27th. The move up today hit 80.68 and pulled back to close at 80.64. The buck could turn down and make one more push down to complete a complex corrective at 80.39 before moving up. I mention this alternate count because it complements the upside move the Euro could take to complete equality of its double zigzag at very strong Fibonacci convergence zone resistance at 1.3691. the pound too has some room to complete a fifth wave on the hourlies. However the Euro is losing momentum now and it failed to take out the 61.8 retracement of its impulse move down from the Oct 24 1.3831 high. It closed between the .618 and .5 at 1.3595. The Pound moved up again today hitting 1.6397 and closing at 1.6365 still short of 1.6750 minor triangle invalidation. Even though down a bit against the Pound, Euro and the Franc the buck ended the week up nicely against the Yen and the Commodity bloc. Especially against the Cad which is nearing strong upside resistance. Given the recent wave structures on the currencies and the intermarket picture it looks like the Buck just might break these levels on the Cad.

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The 10 year yield appears to have finished a flat at micro degree. If the yield moves up above the 2.77 high in impulsive fashion it will support a bid for the USD. Interest rates have been stubborn in giving up any ground to the QE. Moves down have been short, choppy with weak momentum while moves up have been strong, sharp and impulsive like.

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As mentioned, Sentiment has been very bearish lately on the metals. It’s even apparent in the mass media. Both gold and silver have moved up from there Nov 25th low. The moves up from the lows started out with nice impulses to the upside but then after correcting in nice zigzags on the hourlies the metals have been struggling to make highs impulsively. Gold’s bounced off of zigzag equality at Fibonacci convergence at 1234 and is sitting at the 1251 just shy of its near high at 12.58 while silver bounced off of deep zigzag 100% equality which almost retraced 100% of the move up. Silver is now sitting just above the 50% retracement at 19.94. the last time sentiment levels were this low, gold move up a 100 bucks.

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