SHORT TERM: pullback/correction continues, DOW +2
Overnight the Asian markets were relatively flat. Europe opened lower and lost 0.7%. US index futures were higher overnight, and at 8:30 the PPI was reported positive: +1.1% vs +1.7%. The market opened unchanged from yesterday’s SPX 1433 close. In the first hour of trading it dipped negative, then rallied to SPX 1438. At 10:00 Consumer sentiment was reported higher: 83.1 vs 78.3. Then the market started to pullback. Around noon the SPX hit 1426, right in the 1422/27 support range, and then tried to rally. At 3:00 the Gov’t reported a Budget surplus: +$75 bln vs -$62.8 bln, which was expected. Right around this time the SPX hit 1431 and pulled back into a 1429 close.
For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds gained 2 ticks, Crude slid 30 cents, Gold dropped $13, and the USD was lower. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Today the WLEI was reported higher: 55.7% vs 54.7%.
The market opened flat today for the third time this week. Then after a rally attempt it headed lower, making a new low for this pullback at SPX 1426. This market has now declined 45 points from last friday’s SPX 1471 high. This is the biggest pullback since the mid-July 51 point pullback (SPX 1380-1329). The largest pullback of the entire uptrend is 54 points. Unless we see a turnaround soon in this market, we’ll likely get a downtrend confirmation - ending the uptrend from early June. Probabilities favor a downtrend 60%/40%. More in the weekend update.
Short term support remains at SPX 1422/27 and SPX 1413/16, with resistance at the 1440 pivot and SPX 1463/64. Short term momentum hit oversold today and then bounced slightly. The short term OEW charts remain negatively biased with the swing level now around SPX 1442. Best to your weekend!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market