SHORT TERM: pullback continues, DOW -104
Last night FED governor Raskin’s speech was released: http://www.federalreserve.gov/newsevents/speech/raskin20120723a.htm. Overnight the Asian markets lost 0.4%. European markets opened higher but lost 0.7%. US index futures were lower overnight. This morning FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20120724a.htm. The market opened slightly higher at SPX 1352, then immediately began to pullback. The SPX had closed at 1351 yesterday. At 10:00 the FHFA housing index was reported higher: +0.8% vs +0.8%. The market continued lower until 11:00 when the SPX hit 1340. Then after a half hour bounce to SPX 1345, while european markets were closing, the market headed lower again. Nearing 3:30 the SPX hit 1329, and then bounced into a 1338 close.
For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.90%. Bonds gained 6 ticks, Crude added 60 cents, Gold added $5, and the USD was higher. Medium term support remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum is displaying a positive divergence at today’s lows. Tomorrow, New home sales at 10:00.
The market opened flat, then resumed its now four day decline. Just last thursday the market hit an uptrend high at SPX 1380. At today’s low the market had declined 51 points to SPX 1329. This is similar to the declines from the SPX 1363 high (54 pts.) and 1375 high (50 pts.) during this uptrend. The uptrend has certainly been choppy, but so far it has been symmetrical.
We have been carrying two potential short term counts within this uptrend. The one posted on the SPX charts, and the other on the DOW. The SPX count suggests the market may have completed a running flat from the SPX 1375 high, when the SPX came within 4 points of its previous 1325 low. This does not rule out another push lower tomorrow into the mid-lower 1320′s. The DOW count suggests the market is completing an irregular wave 2 flat, which started at the SPX 1363 high. Support here would be around SPX 1310. With the increased volatility in recent days we should have the answer this week.
Short term support is at SPX 1333/38, 1324/27 and the 1313 pivot. Overhead resistance is at SPX 1342/47, then the 1363 and 1372 pivots. Short term momentum displays a positive divergence. The short term OEW charts are still negatively biased with the swing level around SPX 1346. Best to your trading! AAPL earnings on deck.
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market