SHORT TERM: market pullback continues, DOW -89
Overnight the Asian markets gained 0.6%. Europe opened higher and gained 0.3%. US index futures were relatively flat overnight. At 8:30 Durable goods orders were reported flat: 0.0% vs +9.8%. Then at 9:00 Case-Shiller was reported higher for the sixth month in a row: +3.0% vs +2.0%. The market opened lower at SPX 1403, then rallied back to friday’s high at 1409. The SPX had closed at 1406 yesterday. At 10:00 Consumer confidence was reported higher: 73.7 vs 72.2, and FHFA housing prices were higher: +0.2% vs +0.7%. After hitting that early high the market then pulled back to SPX 1400 by 10:30. Another rally attempt followed, which also ended at SPX 1409 around noon. Then the market pulled back to SPX 1399 by 2:30, and bounced to 1404 by 3:00. In the final hour the SPX hit 1398 just before, just before a 1399 close.
For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.35%. Bonds gained 6 ticks, Crude slipped 50 cents, Gold dropped $8, and the USD was higher. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: New home sales at 10:00, then the FED’s Beige book at 2:00. Also at 12:15 there is a speech from FED governor Tarullo.
The market opened lower today, rallied to SPX 1409, pulled back, then rallied to 1409 again before heading lower. At the same time this was occurring the DOW was making lower highs. This suggests the first rally, Minor wave 1, from SPX 1343 may have concluded today at SPX 1409. We posted a green tentative Minor 1 label on the SPX hourly chart. Should this be correct we should now expect a pullback to either the OEW 1386 pivot range, or the 1372 pivot range.
Short term support drops to SPX 1396/98 and the 1386 pivot, with resistance at SPX 1402/03 and 1413/16. Short term momentum displays a negative divergence at today’s highs, and ended the day nearly oversold. The short term OEW charts remain positive with the swing level now around SPX 1397. Best to your trading!
MEDIUM TERM: uptrend probably underway
LONG TERM: bull market