SHORT TERM: SPX/NDX post new bull market highs, DOW -68
Overnight the Asian markets gained 0.3%. European markets opened higher and gained 0.8%. US index futures were higher overnight, and the market opened at a new uptrend high, SPX 1421, and continued to rally. Around 10:30 the SPX hit a new bull market high at 1427 and then began to pullback. The pullback continued into the last half hour of trading as the SPX hit 1411. Then a small bounce into the close ended the day at SPX 1413.
For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.35%. Bonds gained 3 ticks, Crude added 35 cents, Gold rallied $15, and the USD was lower. Medium term support remains at the OEW 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum hit extremely overbought at today’s high, theen oversold. Tomorrow, Existing home sales at 10:00, then the FOMC minutes at 2:00.
The SPX opened at a new uptrend high today, made a new bull market high, and then pulled back. The NDX made a new bull market high as well, but the DOW/NAZ did not. The divergence between major indices, futures/cash, and profit taking in AAPL helped to create the largest pullback since the first few days of August. After we posted an hourly chart of the DOW in the comment section last night, we noted that the next fews days will be quite interesting. Today’s updated version.
With the DOW failing to make a new bull market high today, and then breaking the lower rising trendline, we need to be a bit cautious if the SPX drops below 1410 and then 1407. The low today was SPX 1411. A break of these levels would suggest a completed Minor wave 3. Then probably an oversold daily RSI would be next for Minor wave 4. But if the SPX breaks 1375, then the uptrend from 1267 is probably over and, the DOW’s diagonal comes into play. This would suggest a retest of SPX 1267 would follow in the weeks ahead. The key levels: SPX 1410/07 and then 1375.
Short term support remains at SPX 1413/15 and then 1402/03, with resistance again at 1422 and then the 1440 pivot. Short term momentum hit extremely overbought today, then declined to oversold. The short term OEW charts remain positively biased, from under 1370, with the swing point now around SPX 1410. Best to your trading!
MEDIUM TERM: new high
LONG TERM: bull market new high