SHORT TERM: market heads lower, DOW -69
Overnight the Asian markets were mostly lower losing 0.4%. Europe opened higher but closed -1.0%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported higher: 386K vs 380K. The market opened flat at SPX 1385. It then dipped to 1382, and rallied to 1388, all in the first 15 minutes. As it started to pullback again; at 10:00 Existing homes sales were reported lower: 4.48 mln vs 4.59 mln, the Philly FED was reported lower: 8.5 vs 12.5, and Leading indicators were reported lower: +0.3% vs +0.7%. The market quickly sold off to SPX 1379 just past 10:00. Then just as suddenly the market rallied to SPX 1390 by 10:30. The volatility continued as the market started to head lower yet again. Around 1:00 the SPX took out the 1379 low for the day and continued lower. At 2:00 the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20120419a.htm. The market continued to decline until 2:30 when the SPX hit 1370. The market then tried to rally, hitting SPX 1379 just before a 1377 close.
For the day the SPX/DOW were -0.55%, and the NDX/NAZ were -0.95%. Bonds gained 4 ticks, Crude slipped 15 cents, Gold added $1.00, and the USD was lower. Support for the SPX drops to the 1372 and 1363 pivots, with resistance at the 1386 and 1440 pivots. Short term momentum hit quite oversold during today’s decline. Tomorrow is options expiration.
A volatile day on Wall street. The market declined only 8 points for the day, but it covered 6o points between all the swings. The market first took out yesterday’s 1383 low, then tried to take out yesterday’s 1390 high, but could only equal it. After that the market sold off quite solidly to 1370 before rebounding somewhat into the close. When the market hit SPX 1379 early, we thought Intermediate wave B could end with another diagonal triangle in the 1396 area. When the market failed at SPX 1390 it then appeared Int. B completed on tuesday at 1393. We can now count a Minute a to SPX 1379, a Minute b to 1390, and a Minute c to 1370 completing Minor wave A. The rally before the close looks like Minor wave B. As long as SPX 1390 is not reached again we’ll count it as such. When it does conclude we should get another Minute abc down.
Short term support is at the 1372 and 1363 pivots, with resistance at the 1386 pivot and SPX 1414. Short term momentum ended the day rising off a quite oversold condition. The short term OEW charts turned negative again today on the second drop below 1385, with the swing point now around 1382. Best to your trading tomorrow on options expiration day!
MEDIUM TERM: DOW downtrending, SPX likely to follow
LONG TERM: bull market