SHORT TERM: choppy market continues, DOW -31
Overnight the Asian markets gained 0.3%. Europe opened higher but lost 1.2%. US index futures were higher overnight. At 8:30 Personal income (+0.1% vs +0.3%)/spending (+0.1% vs +0.5%) and PCE prices (+0.1% vs + 0.2%) were all reported higher. The market opened one point above yesterday’s SPX 1638 close, ticked up to 1640, then started to pullback. At 9:45 the Chicago PMI was reported higher: 53.0 vs 52.3. Then at 10:00 Consumer sentiment was reported higher as well: 82.1 vs 80.0. The pullback continued into the afternoon, with short 2-3 point bounces, until the SPX hit 1628 just after 1:00. Then the market rebounded to SPX 1636 right after Kerry’s press conference on Syria. After a pullback to SPX 1631 by 2:00 the market bounced back to 1636 just past 3:00. Then another pullback hit SPX 1628 just before a 1633 close.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.75%. Bonds lost 13 ticks, Crude slid $1.10, Gold dropped $12, and the USD was higher. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Last night the FED reported another decline in the M1 multiplier: 0.740 vs 0.758. Today the WLEI was reported lower as well: 54.2% vs 54.7%. The WLEI has been declining slowly since hitting a peak at 58.8% in early February.
Another choppy trading day as the market makes lower highs and lows from yesterday. Around 1:00 we posted a tentative green Minor b label at yesterday’s SPX 1646 high. This suggests Minor c of Intermediate C could be underway. The rationale is simple. After Wednesday’s apparent Minor wave a low at SPX 1627, the market has rallied in an abc pattern: 1641-1631-1646. Today the market continued yesterday’s afternoon decline dropping to SPX 1628. This suggests that abc rally has completed. The market may, however, bounce around a bit further. As Minor b of Int. A was an expanding triangle. Yet, either way the trend is still down heading into September.
Short term support remains at the 1628 and 1614 pivots, with resistance at SPX 1636-1640 and SPX 1648-1649. Short term momentum remained between oversold and neutral all day. The short term OEW charts remain negative with the reversal level now SPX 1646. Best to your holiday weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market