SHORT TERM: market continues to drift, DOW -7
Overnight the Asian markets lost 0.2%. European markets opened lower and lost 0.6%. US index futures were lower overnight as well. At 8:30 the NY FED was reported back into contraction mode: -5.9 vs +7.4, and the CPI was reported flat 0.0% vs 0.0%. At 9:15 Industrial production was reported higher: +0.6% vs +0.4%, and Capacity utilization rose: 79.3 vs 78.9. The market opened lower at SPX 1402 but started to rally. At 10:00 the SPX hit 1407, and started to pullback, when the NAHB housing index was reported higher: 37 vs 35. Around 2:00 the SPX hit 1404 and tried to rally again. Around 3:00 the SPX hit 1408, then pulled back into at 1406 close.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.35%. Bonds lost 19 ticks, Crude gained 75 cents, Gold rose $5, and the USD was higher. Medium term support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum hovered around neutral for most of the day. Tomorrow, weekly Jobless claims at 8:30, along with Housing starts and Building permits. At 10:00 the Philly FED.
The market opened lower today, rallied a bit in the morning, and then went into a small trading range for the rest of the day. For the past 8 trading days the market has remained between SPX 1394 and 1410: just barely more than a 1% swing. We checked the weekly charts looking for a similar situation: a tight trading range and declining volume. And sure enough we found another period, such as this, during Major wave 3 of Primary I. That uptrend appeared to have stalled, while gradually creeping up, in December 2010. After the holidays ended the market took off to the upside. Labor Day is a bit more than two weeks away.
Short term support remains at SPX 1402/03 and the 1386 pivot, with resistance at SPX 1413/15 and 1422. Short term momentum ended the day at neutral. The short term OEW charts remain positive with the swing point now around SPX 1400. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market