SHORT TERM: another gap down opening, DOW -34
Overnight the Asian markets lost 0.9%. European markets opened lower but gained 0.5%. US index futures were lower overnight, and at 8:30 the PPI was reported lower: -0.2% vs 0.0%. The market gapped down at the open to SPX 1350, dipped to 1349, and began to rally. The SPX had closed at 1358 yesterday. Around 10:00 Consumer sentiment was reported higher: 77.8 vs 76.4. Nearing 11:30 the SPX hit, the now familar, 1366 level and then began to pullback. The pullback continued all afternoon and the SPX hit 1353 at the close.
For the day the SPX/DOW were -0.30%, and the NDX/NAZ were mixed. Bonds gained 9 ticks, Crude slid $1.25, Gold dropped $13.00, and the USD was higher. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum vacillated around neutral, then headed toward oversold near the close. Today the WLEI was reported higher: 50.0 vs 49.4.
Yesterday, after hours, JPM reported a $2 bln trading loss in derivative trading. Index futures sold off and bounced around during the night. The market gapped down again, 4th time this week, at the open and then began to rally. By 11:30 the SPX was right back at 1366, matching tuesday’s high and thursday’ high. Wednesday’s high was 1364. While the market did head lower from an apparent contracting triangle it immediately reversed creating another short term pattern. It has been that kind of week. We’ll cover the short term wave count in the weekend update.
Short term support remains around SPX 1340 and the 1313 pivot, with resistance at the 1363 and 1372 pivots. Short term momentum is nearing oversold. The short term OEW charts remain negatively biased from SPX 1395, with the swing point now in the upper 1363 pivot range. Best to your weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market