SHORT TERM: market posts a lower low, DOW -49
Overnight the Asian markets mostly ignored yesterday’s US decline slipping only 0.2%. Europe opened lower but recovered some -0.1%. US index futures were higher overnight, and at 8:30 the Trade deficit showed a slight improvement: -$48.7 bln vs -$50.1 bln. The market opened flat at SPX 1341, yesterday’s close. After a dip to SPX 1339 the market hit 1345 by 10:00. Also at ten Wholesale inventories were reported less positive: +0.3% vs +0.6%. Then the market went into a trading range until the FOMC statement at 2:00: http://www.federalreserve.gov/newsevents/press/monetary/20120711b.htm. After the report the market dropped to SPX 1333 by 2:30, setting up a positive divergence, and tried to rally. Nearing the close the SPX hit 1344 and ended the day at 1341.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.50%. Bonds lost 5 ticks, Crude rallied $2.20, Gold added $8, 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 is displaying another positive divergence. Tomorrow, weekly Jobless claims and Export/Import prices at 8:30, then the Budget deficit at 2:00.
The market opened flat today, then went into a trading range until the FOMC minutes were released. One half hour after the report the SPX made a new low for this pullback at 1333. The market then rallied from that low. But the SPX lost an important support level yesterday at 1344/47, which is now acting as resistance, and dropped through another today at 1334/38 before recovering. The uptrend from SPX 1267 to 1375 is starting to look more and more like an ABC, (see DOW charts). And this recent decline from 1375 is starting to look impulsive. Not good news medium term. Should the market start to recover these support levels, impulsively, then the uptrend can resume. If not, a retest of the SPX 1267 low is likely to coincide with a two year cycle Tech low in July/August.
Short term support for the SPX is at 1334/38 and then 1324/27, with resistance at 1244/48 and the 1363 pivot. Short term momentum displays a positive divergence at today’s low. The short term OEW charts remain negative from around SPX 1350, with the swing point now at 1348. Best to your trading!
MEDIUM TERM: uptrend looking quite choppy
LONG TERM: bull market