SHORT TERM: gap down opening pullback, DOW -121
Overnight the Asian markets lost 0.6%. European markets opened lower and dropped 1.7%. US index futures were lower overnight as well. The market gapped down at the open to SPX 1371, and declined to 1367 by 10:00. The SPX had closed at 1377 yesterday. At 10:00 FED governor Duke’s speech was released: http://www.federalreserve.gov/newsevents/speech/duke20120720a.htm. The market then tried to rally, but could only manage to gain 3 points before dipping to 1366. Another bounce to SPX 1370 followed by 11:00. Then the market zigzag’d it was lower to SPX 1362 just before the close, and ended the week at 1363.
For the day the SPX/DOW were -1.0%, and the NDX/NAZ were -1.4%. Bonds gained 15 ticks, Crude slid $1.40, Gold added $4, and the USD was higher. Support for the SPX drops to the 1363 and 1313 pivots, with resistance back to the 1372 and 1386 pivots. Short term momentum ended the week quite oversold. Today the WLEI was reported higher: 48.1% vs 47.8%.
The market gapped down today, for the first time since last thursday, on this Options expiration friday. The gap down dropped right below the OEW 1372 pivot at the open as the market headed into the 1363 pivot range. Nothing unusual, as the uptrend made a new high yesterday and ran right into resistance at the 1386 pivot range. The SOX index has rallied 8.3% off tuesday’s low. After yesterday’s SOX gap up opening, and weakness in INTC, a pullback was expected as well in this potentially leading sector.
Short term support is now at the 1363 pivot and SPX 1342/47, with resistance at the 1372 and 1386 pivots. Short term momentum was quite oversold today. The OEW short term charts are still positive with the swing point right around SPX 1360. Best to your weekend!
MEDIUM TERM: choppy uptrend
LONG TERM: bull market