SHORT TERM: early pullback then rally, DOW +12
Overnight the Asian markets were flat. European markets opened lower but closed +0.1%. US index futures were lower overnight, and at 8:15 the ADP index was reported lower: 162K vs 201K. The market opened higher at SPX 1448, two points above yeaterday’s close, but immediately began to pullback. At 10:00 the SPX hit 1442 and ISM services was reported higher: 55.1 vs 53.7. Then the market tried to rally again. Around 12:30 the SPX hit 1454, pulled back to 1447 by 3:00, and then closed at 1451.
For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.60%. Bonds gained 4 ticks, Crude dropped $3.90, Gold added $3, and the USD was higher. Medium term support for the SPX remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: the monthly ECB meeting, press conference, and weekly Jobless claims by 8:30. Then Factory orders at 10:00 and the FOMC minutes at 2:00.
The market reversed its recent activity today by opening higher, pulling back, and then rallying. Instead of making the high for the day in the first half hour of trading, then pulling back for most of the day. This could be a sign that the recent choppy activity is coming to a close. Tomorrow the ECB meets, with a press conference to follow, before the US market opens. Then the FOMC minutes, we expected on wednesday, will be reported at 2:00. Two potential market movers, back to back, in one day.
With today’s rally exceeding yesterday’s SPX 1452 high, the market may be preparing to move higher. We still see SPX 1431 as the Int. wave iv low, then a series of one-two’s: SPX 1450-1436-1457-1439. Short term support remains at the 1440 pivot then SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum hit overbought today, then pulled back to neutral. The short term OEW charts turned positive with the swing level at SPX 1447. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market