SHORT TERM: lower low then rally, DOW -17
Overnight the Asian markets were mostly lower losing 1.2%. European markets opened lower and lost 0.6%. US index futures were lower overnight, rallied, and then turned flat heading into the open. At the open the SPX was 1 point higher than friday’s 1278 close, and bounced to 1283 in the first few minutes. Then it pulled back to SPX 1271, a new downtrend low, by 10:00. At 10:00 Factory orders were reported negative again: -0.6% vs -1.9%. The market tried to rally but could only reach SPX 1278 by 11:00. Also at 11:00 the FED issued the following: http://www.federalreserve.gov/newsevents/press/bcreg/20120604a.htm. Another pullback followed to SPX 1267 by 1:30. At 2:00 the FED issued the following: http://www.federalreserve.gov/newsevents/press/other/20120604a.htm. The market then rallied to SPX 1280 by 2:30, pulled back to 1273 by 3:30, and edned the day abount unchanged at 1278.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.60%. Bonds lost 20 ticks, Crude gained $1.00, Gold slipped $2, and the USD was lower. Support for the SPX remains at 1261 and the 1240 pivots, with resistance at 1291 and then 1303 pivots. Short term momentum hit extremely oversold at today’s low, then bounced to neutral. Tomorrow, ISM services at 10:00.
The market opened slightly higher today, then dropped down to new downtrends lows. It did find support in the OEW 1261 pivot range, and then had its best rally since this recent decline from SPX 1320 began. We are counting an ABC zigzag underway from SPX 1415, DOW 13,339. With Intermediate wave A completed at SPX 1292, and Int. wave B at 1335. Minor waves 1 and 2, of Int. wave C, completed at SPX 1299 and 1320 respectively. Minor wave 3 may have bottomed today at SPX 1267, or this may only be wave 1 of Minor 3. Should the market rally into the mid-1280′s then a Minor wave 3 low is likely. If not, then wave 1 of Minor 3 is likely. We should probably know by tomorrow.
Support for the SPX remains at the 1261 and 1240 pivots, with resistance at the 1291 and 1303 pivots. Short term momentum hit extremely oversold today, then rose to neutral. The short term OEW charts remain with a negative bias from 1323 with a positive swing point around 1302. Best to your trading!
MEDIUM TERM: downtrend continues
LONG TERM: bull market