SHORT TERM: gap down open market rebounds, DOW -30
Overnight the futures market gapped down, and was as much as 20 points lower from friday’s close. Asian markets caught the brunt of that selling -1.6%. When Europe opened the futures markets were already recovering and they ended +0.6%. US index futures remained moderately lower heading into the open, and the market gapped down to SPX 1364. The SPX had closed at 1369 on friday. The market immediately tried to rally and hit SPX 1370 by 10:00. Another pullback to retest SPX 1364 ended by 10:30, and the market rallied again. At 2:00 the market hit SPX 1374, and then started to pullback. At 3:00 Consumer credit was reported expanding again: +21.4 bln vs +8.7 bln. Just before the close the SPX hit 1368, then ended the day at 1370.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.05%. Bonds were flat, Crude slid 60 cents, Gold dropped $4.00, and the USD was higher. Support for the SPX remains at the 1363 and 1313 pivots, with resistance at the 1372 and 1386 pivots. Short term momentum rose from extremely oversold on friday to neutral today. Nothing on the economic calendar tomorrow.
Overnight the SPX was down as much as 20 points, but recovered to open down five at SPX 1364. With an extremely oversold short term condition, a retest, and right at the OEW 1363 pivot Minor wave A may have ended. Minor wave B, underway now, could have ended at today’s high, SPX 1374. Short term momentum hit neutral, and the 10 point rally was certainly sufficient if this is going to be a steep decline, i.e. SPX 1422-1357. If this Minor B wave shifts from simple to a bit more complex it could rally back to the 1386 pivot. Either way, when it concludes Minor C should take the market lower.
Short term support is at the OEW 1363 pivot, and SPX 1340. Short term resistance is at the 1372 and 1386 pivots. The short term OEW charts remain negative from SPX 1395 with the swing point at the 1386 pivot. Best to your trading!
MEDIUM TERM: SPX/DOW uptrends weakening, NDX/NAZ downtrending
LONG TERM: bull market