SHORT TERM: follow through rally then pullback, DOW -2
Overnight the Asian markets gained 0.3%. Europe opened higher and rallied 1.8%. US index futures were lower overnight, but edged higher heading into the open. At the open the SPX hit 1319, pulled back to 1316, and then continued higher. The market had closed at SPX 1316 yesterday. At 10:00 Existing home sales were reported higher: 4.62 mln vs 4.48 mln. The market rallied to SPX 1328 by 11:00, was extremely overbought, and then began to pullback. Around noon the SPX hit 1320, rallied to 1325 by 1:00, then hit 1320 again by 1:30. After another rally to SPX 1325 the market pulled back into the close. Just after 3:30 the SPX hit 1310, and then bounced to end the day at 1317.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.25%. Bonds lost 7 ticks, Crude slid $1.35, Gold fell $25.00, 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 hit extremely overbought then pulled back. Tomorrow, New homes sales and FHFA housing at 10:00.
The market opened slightly higher today, dipped, and then made a higher rally high at SPX 1328. This is now a 36 point rally from friday’s 1292 low, the largest rally without a meaningful pullback in a month. Then right after nearing our swing point at SPX 1329 the market had its first meaningful pullback. The pullback continued for the rest of the day, accelerating to the downside in the last hour of trading. After hitting SPX 1310, a 50% retracement, the market bounced to close at 1317. While the pullback was a bit more than would have normally been expected, the OEW 1313 pivot held support.
Short term support remains at the 1313 and 1303 pivots, with resistance now at SPX 1328 and 1342/47. Short term momentum dropped past neutral after hitting extremely overbought for the first time in nearly a month. The short term OEW charts remain with a negative bias from SPX 1395, but the swing point for a potential new uptrend is now 1327. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market