SHORT TERM: new downtrend lows, DOW -73
Overnight the Asian markets were mostly lower losing 1.3%. Europe opened lower and lost 0.7%. US index futures were higher overnight and the market opened higher at SPX 1308. The SPX had closed at 1305 yesterday. Within the first few minutes the market rallied to SPX 1311 and then dipped to 1305 by 10:00. Another rally attempt followed as most awaited the opening of Facebook’s IPO. By 11:00 the SPX hit 1312, and then dropped sharply to 1299 by noon. Again the market tried to rally, this time reaching only SPX 1307 at 12:30 before pulling back yet again. Choppy session. By 3:00 the SPX hit 1295 and tried to rally again. Around 3:30 the SPX hit 1300 then declined to 1292 in the closing minutes before ending the week at 1295.
For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -1.20%. Bonds lost 2 ticks, Crude dropped $1.55, Gold rose $17.00, and the USD was lower. Support for the SPX drops to the 1291 and 1261 pivots, with resistance now at the 1303 and 1313 pivots. Short term momentum is oversold, after hitting extremely oversold. Today the WLEI was reported at an expansionary 50.4%.
The market opened slightly higher again today, but could not get anything going to the upside after several rally attempts. Foreign markets continue to weigh on the US stock indices. The abA-B-abC wave we had been watching since SPX 1366 is now working on a complete double extension. At the low for the day, SPX 1292, this downtrend overlapped the Major wave 1 uptrend high of SPX 1293. This suggests the possible alternate counts noted yesterday are gaining in probability. We will cover this situation, and these possibilities, in this weekend’s update. Best to you and yours!
MEDIUM TERM: downtrend
LONG TERM: bull market