SHORT TERM: another volatile FOMC day, DOW -33
Overnight the Asian markets slipped 0.1%. European markets opened higher and gained 0.6%. US index futures were higher overnight. At 8:15 the ADP index was reported lower: 163K vs 179K. The market gapped up the open to SPX 1384, hit 1385, and then began to pullback. The SPX had closed at 1379 yesterday. At 10:00 ISM manufacturing was reported still in contraction mode: 49.8 vs 49.7, and Construction spending was reported lower: +0.4% vs +0.9%. The market hit SPX 1378 by 10:30 and then tried to rally. Around 1:00 the SPX had only managed to get back to opening levels at 1384, and then started to pullback ahead of the FOMC statement. Near 2:15 the FED released their statement:
. The market immediately sold off to SPX 1373, and then started to recover. Around 3:30 the SPX hit 1382, and then pulled back to close at 1375.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.45%. Bonds lost 10 ticks, Crude gained 70 cents, Gold slid $13, and the USD was higher. Medium term support for the SPX remains at the 1372 and 1363 pivots, with resistance at the 1386 and 1440 pivots. Short term momentum hit oversold during today’s pullback. Tomorrow, weekly Jobless claims at 8:30, Senate testimony from FED director Eichner at 9:00, then Factory orders at 10:00.
The market gapped up at the open today for the third time in the last five trading days. The gap up, however, was immediately filled in the first hour of trading. After that the market went back into its holding pattern ahead of the FOMC statement. Volatility increased after the statement as the market soldoff to its lowest level of the week, SPX 1373, then rebounded. Tomorrow morning the ECB reports.
Thus far, since the ECB president Draghi’s statement last week, the market rallied from SPX 1329-1392 by monday. The pullback since that high has been 19 points, thus far, to SPX 1373, right at the OEW 1372 pivot. Short term momentum dropped into oversold territory during this pullback. Short term support remains at the 1372 and 1363 pivots, with resistance at the 1386 pivot and SPX 1402/03. The short term OEW charts remain positive with the swing level now around SPX 1370. Could be a volatile opening tomorrow depending on what comes out of the ECB meeting. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market