wednesday update

SHORT TERM: market pullback from SPX 1269 continues, DOW -140

Overnight the Asian markets were all lower losing 0.7%. European markets opened higher but were all lower as well losing 1.0%. US index futures were slightly higher overnight and the market opened one point higher, at SPX 1266, before resuming the pullback. Around 11:30 the SPX hit support at 1250 and tried to rally. After 2 hours plus the market could only rise about 4 SPX points to 1254. Then it started drifting lower into the close. At 3:30 the SPX hit 1249, then bounced slightly to close at 1250.

For the day the SPX/DOW were -1.20%, and the NDX/NAZ were -1.25%. Bonds gained 21 ticks, Crude lost $1.80, Gold dropped $38.00, and the USD was higher. Support for the SPX drops to 1240 and then 1222, with resistance at 1261 and 1291. Short term momentum nearly hit extremely oversold today. Tomorrow, weekly Jobless claims at 8:30, the Chicago PMI at 9:45, then Pending home sales at 10:00.

The market opened slightly higher but then resumed the expected pullback from yesterday’s SPX 1269 high. The low today was SPX 1249 for a full 20 point decline. This is a bit more than expected but still in line with the 13 point pullback posted earlier in this rally. The market could dip a few points lower early tomorrow, to set up a positive RSI divergence, and then rally. Should it pullback below SPX 1243 we’ll then have a wave 1 and 4 overlap in our short term count. Short term OEW charts are holding positive. Short term support is now at SPX 1250, the 1240 pivot range and then 1230. Short term resistance is at the 1261 pivot range, SPX 1278, and then the 1291 pivot range. Best to your trading!

MEDIUM TERM: uptrend in DOW, other majors likely to confirm

LONG TERM: inflection point

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