wednesday update

SHORT TERM: gap opening nine day streak ends, DOW +4

Overnight the Asian markets were mixed. Europe opened lower and closed -0.60%. US index futures were higher overnight, and at 8:30 the PPI was reported: +0.4% vs +0.4%. The market opened higher this morning at SPX 1197. It had closed at SPX 1193 yesterday. Right after the open the market continued to move higher, until about 10:30, when it hit a new high (1208) for this rally from SPX 1102. After that a sharp pullback followed to the OEW 1187 pivot again when the market hit 1184 by 1:30. Then for the rest of the afternoon the market worked its way higher to close at SPX 1194.

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were -0.50%. Bonds were up 11 ticks, Crude gained 80 cents, Gold added $3.00, and the USD was lower. Support for the SPX remains at 1187 and then 1176, with resistance at 1222 and then 1240. Short term momentum is displaying a negative divergence at today’s high. Tomorrow, weekly Jobless claims and the CPI at 8:30. Then at 10:00 Existing homes sales, the Philly FED, and Leading indicators. Options expiration is friday.

For the past five trading days the OEW 1187 pivot has played a key role in the markets daily activity. On thursday/friday it acted as resistance and the market closed under it both days. Then after a gap up opening on monday it has acted as support for the past three days, and closing over it all three times. Obviously, as long as this pivot’s range holds support the market has a positive bias. When it fails Int. wave v will be underway. Currently there is a negative divergence on the SPX hourly chart and a weakening MACD. Intermediate wave iv is now twice the length of Int. wave ii. Intermediate wave iii was four times the length of Int. wave i. As soon as the financials weaken again Int. wave v should get underway. Best to your trading!

MEDIUM TERM: downtrend low SPX 1102

LONG TERM: bear market highly probable

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987