SHORT TERM: gap up opening sold, DOW -83
Overnight the Asian markets gained 0.2%. European markets opened higher and gained 0.7%. US index futures were higher overnight and the market gapped up at the open to SPX 1359. The market had closed at SPX 1352 yesterday. Within the opening minutes the SPX neared the OEW 1363 pivot when it hit 1362. That was the high for the day. After hitting slightly overbought, short term, the market started to pullback to close the opening gap. It did that and more. At 11:00 the SPX hit 1348, held until 12:30 as it bounced to 1352, then headed lower again. By 3:30 the SPX hit 1336 then bounced to close at 1341.
For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.00%. Bonds gained 1 tick, Crude slid $2.00, Gold dropped $19, and the USD was higher. Support for the SPX remains at the 1313 and 1303 pivots, with resistance still at the 1363 and 1372 pivots. Short term momentum touched slightly overbought off yesterday’s positive divergence, then dropped to quite oversold. Tomorrow, the Trade deficit at 8:30, Wholesale inventories at 10:00, then the FOMC minutes at 2:00.
The market gapped up today and looked like it was heading higher. When it started to pullback off the SPX 1362 high, it appeared headed back down to close the opening gap. But when it continued beyond that level, nearing yesterday’s low at SPX 1347, it appeared to have reversed its momentum. The rally off that low lasted about 1.5 hours and was a weak 4 points. When the market started to pullback again it gained downside momentum when breaking through yesterday’s SPX 1347 low. Around 3:30 the SPX hit 1336, the next support zone, and bounced into the close.
Today’s pullback was a lot more than expected and this uptrend is again looking quite choppy. We’re maintaining the 1-2, i-ii count posted on the SPX charts. But this recent rally from SPX 1309 is not trending as expected. If the market breaks the SPX 1334/38 support zone this entire uptrend will start to look more and more like an ABC. The alternate count posted on the DOW charts. Short term support is at SPX 1334/38 and 1324/27. Overhead resistance is now at SPX 1342/47 and the 1363 pivot. Short term momentum ended the day oversold. The short term OEW charts turned negative on the break below SPX 1347, with the swing point still at 1350. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market