SHORT TERM: market gaps down, DOW -77
Overnight the Asian markets were +0.5%. Europe opened higher but lost 0.2%. US index futures were lower overnight. At 8:30 Retail sales (-0.2% vs +0.1%) and the PPI (-1.0% vs -0.2%) were reported lower. The market gapped down at the open to SPX 1319 and pulled back to 1315 by 10:00. At 10:00 Business inventories were reported higher: +0.4% vs +0.3%. The market then staged a rally, hitting SPX 1327 by 11:00. Another pullback followed to SPX 1320 by 12:00, and then the market tried to rally again. After hitting a double top at SPX 1327 just past 12:30 the market started to pullback. Heading into the close the SPX hit 1311, then bounced to close at 1315.
For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.80%. Bonds gained 15 ticks, Crude lost 75 cents, Gold added $6.00, and the USD was lower. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum remained under overbought for most of the day, then dropped below neutral. Tomorrow, weekly Jobless claims and the CPI at 8:30.
The market gapped down at the open today, dipped to SPX 1315, and tried to rally. Then after hitting SPX 1327, for the second time today, in early afternoon it pulled back. Everyday this week has been another market drama. We mentioned yesterday two potential impulsive counts. One with a Minor 1 high at SPX 1329 then an irregular Minor 2 to 1307, and the other with a Minor 1 high at 1336 and a Minor 2 at 1307. Both are still in play despite today’s pullback. The third count, is not impulsive, an ABC into the SPX 1336 high. This, as noted yesterday, will not be eliminated until that high is exceeded. Today’s market activity did not eliminate any of these potential counts. We’re still on a WROC buy signal while this market has gone sideways to slightly lower.
Short term support remains at the 1313 and 1303 pivots, with resistance still at SPX 1328/35 and 1342/47. Short term momentum is below neutral. The short term OEW charts have moved back to neutral again as the swing point is at SPX 1314. Best to your trading!
MEDIUM TERM: uptrend may be underway
LONG TERM: bull market