SHORT TERM: pullback continues, DOW -50
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.7%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported higher: 368K vs 330K, Personal income was higher: +2.6% vs +0.6%, Personal spending higher: +0.2% vs +0.4%, and PCE prices were flat: 0.0% vs 0.0%. The market opened two points below yesterday’s SPX 1502 close, then dipped to 1498 before trying to rally. At 9:45 the Chicago PMI was reported higher: 55.6 vs 48.9. The market then rallied to SPX 1504 by 10:00. Another pullback followed to a lower low at SPX 1497. Then after hitting quite oversold, short term, the market tried to rally again. At 2:30 the market made another lower high at SPX 1503, then pulled back into a 1498 close.
For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.15%. Bonds gained 3 ticks, Crude slid 45 cents, Gold lost $10, and the USD was lower. Medium term support drops to the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: the monthly Payrolls report at 8:30 (est. +180K); Consumer sentiment, ISM manufacturing and Construction spending at 10:00; then monthly Auto sales.
The market opened slightly lower today, dropped to the SPX 1498 level we noted yesterday, rallied to 1504, and then dropped to a lower low at 1497. This lower low completely retraces the potential Minute wave v we noted yesterday, (1498-1510), suggesting Minor wave 3 completed at SPX 1510. To confirm this event two things should occur: 1. a pullback of more than 10 points – done, and 2: our short term OEW charts turning negative, which currently requires a drop to below SPX 1497. Probabilities suggest this will occur shortly.
With Minor wave 3 completed at SPX 1510 we should then expect a 30+ point decline for Minor wave 4. There is some wave structure support around SPX 1480, and then the bull market breakout level is at SPX 1471/75. After this pullback, the uptrend should then resume its rise to new highs for Minor wave 5.
Short term support is at SPX 1471/75 and 1462/64, with resistance at the 1499 and 1523 pivots. Short term momentum dropped to quite oversold after yesterday’s negative divergence, then bounced to neutral before heading lower again. The short term OEW charts remain barely positive with the swing level now around 1497. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market