SHORT TERM: DOW drops another 200 points on late selling
The market opened mixed this morning after the Q2 GDP number was reported in line with expectations (+3.4%). However, the enthusiasm only lasted about one hour as the SPX rallied to 1489, and the DOW was up about 50 points. Then another selling wave hit the market, taking the SPX below yesterdays lows to 1462. This level held, but another rally attempt to break through short term resistance at 1484 failed. By 3:00 the market started to slip lower, and at 3:30 when the COT report was released, it fell to new lows for the day. With today’s selling, the DOW joins the SPX in a confirmed OEW downtrend (correction). Also, the Major wave 4 scenario gathered more support as the SPX just overlapped its previous uptrend high of 1462. Naturally, defensive positions are still suggested, while the market determines if this is a Major correction or another minor one. The details of which were posted in the morning report. At the close the SPX/DOW were 1.55% lower, and the NDX/NAZ lost 1.5%. Bonds gained a few ticks, Crude rallied nearly $2.00, Gold lost $2.00, and the Euro was sharply lower. After 4:00 the selling continued with the SPX now down another seven points. Might not be a good monday. But things can change over the weekend. Enjoy!
MEDIUM TERM: neutral, correction underway
LONG TERM: bullish.