SHORT TERM: gap up opening faded, DOW -25
Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and the market gapped up at the open to SPX 1418. The SPX had closed at 1413 yesterday. Within the first few minutes the SPX hit its high for the day at 1420, and then began to pullback. At 10:00 New home sales were reported higher: 389K vs 373K, and the FHFA housing price index rose: +0.7% vs +0.2%. The market pulled back to SPX 1412 by about noon, then bounced to 1416 ahead of the FOMC statement: http://www.federalreserve.gov/newsevents/press/monetary/20121024a.htm. After a copy and paste report the market then headed lower. In the final hour of trading the SPX hit 1407, then bounced to close at 1409.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.35%. Bonds lost 3 ticks, Crude slid 95 cents, Gold dipped $5, and the USD was flat. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: weekly Jobless claims and Durable goods orders at 8:30, then Pending home sales at 10:00. The first look at Q3 GDP is on friday.
The market gapped up at the open today, made it to SPX 1420, and then headed back down for the rest of the day. In the last hour of trading the Techs made a new low for their downtrend, and the Cyclicals did as well. We continue to believe this current decline is targeting the SPX 1391/93 fibonacci/retracement area next. At these levels we would have a 38.2% retracement of the uptrend, and Minor C will equal 1.618 Minor A. There are a few short term support levels, just under today’s low, before that could occur.
Short term support remains at SPX 1402/03 and SPX 1396/98, with resistance at SPX 1413/16 and SPX 1422/27. Short term momentum hit neutral today, then ended the day slightly oversold. The short term OEW charts remain negatively biased from SPX 1448, with the swing level now around 1431. Best to your trading!
MEDIUM TERM: downtrend likely underway
LONG TERM: bull market