SHORT TERM: pullback continues, DOW -64
Overnight the Asian markets gained 0.8%. Europe opened lower and closed -0.6%. US index futures were higher overnight. At 8:30 Personal income was reported higher: +0.5% vs +0.2%, but Personal spending was unchanged: 0.0% vs 0.0%. PCE prices ticked higher 3.6% vs 3.5% as well. At 9:00 Case-Shiller reported an increase in month over month prices: $138.96K vs $135.91K. The market opened lower at SPX 1383, rallied to 1387 in the opening minutes, then pulled back to 1381 by 10:00. The SPX had closed at 1385 yesterday. At 10:00 the Chicago PMI was reported higher: 53.7 vs 52.9, and Consumer confidence was reported higher: 65.9 vs 62.0. The market rallied back to SPX 1387 by 11:30, then pulled back to 1380 by 1:00. Another rally attempt ended at 2:00 at SPX 1385, then the market made new lows for the day at 1379 and closed there.
For the day the SPX/DOW were -0.45%, and the NDX/NAZ were mixed. Bonds gained 6 ticks, Crude dropped $2.35, Gold slid $9, and the USD was lower. Medium term support remains at the 1372 and 1363 pivots, with resistance at the 1386 and 1440 pivots. Short term momentum barely touched oversold today. Tomorrow, the ADP index at 8:15, then ISM manufacturing and Construction spending at 10:00. In the early afternoon Auto sales, and then the FOMC statement at 2:15.
After hitting a new uptrend high at SPX 1392 yesterday, around 10:30, this market has remained in the 1380′s, except for today’s close. It appears to be on pause ahead of the FED’s FOMC statement tomorrow. As we noted yesterday, a pullback to the OEW 1372 pivot, or even the 1363 pivot, would be quite normal after a 60+ point rally.
Short term momentum appears to have some more room on the downside as well. Volatility is likely to increase after the FED’s statement, right into the ECB’s statement and press conference thursday.
Short term support remains at the 1372 and 1363 pivots, with resistance at the 1386 pivot and SPX 1402/03. Short term momentum is declining and just above oversold. The short term OEW charts remain positive with the swing point around SPX 1368. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market