SHORT TERM: consolidation continues, DOW -75
Overnight the Asian markets gained about 0.2%. European markets also gained about 0.2%. US index futures were relatively flat overnight and the market opened unchanged at SPX 1321. After a dip to SPX 1320 in the opening minutes the market rose to 1324, yesterday’s high, by 10:00. Around 10:00 Consumer sentiment was reported higher: 79.3 vs 77.8. After a pullback to SPX 1319 by 10:30 the market went into a 1319-1324 trading range until about 2:00. Then the market broke to the downside. By 3:30 the SPX hit 1314 and then bounced into a 1318 close.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.10%. Bonds gained 9 ticks, Crude added 15 cents, Gold rallied $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 touched overbought early then dipped. Last night the FED reported a decline in the M1-multiplier, New home sale prices, and the Monetary base. Today the WLEI dipped below neutral to 49.7%, but Consumer sentiment rose to 44.3%.
The market opened flat then rose to SPX 1324 in the first half hour before heading lower for the rest of the day. This small rise improved the chances that an uptrend is underway, as the market cleared the SPX 1321 swing point before pulling back. Should an uptrend be underway we would expect the market to hold the 1313 pivot range during this pullback. Short term support remains at the 1313 and 1303 pivots, with resistance at SPX 1324/28 and 1342/47. Further details in the weekend report. US markets are closed monday for Memorial Day. Enjoy your weekend!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market