SHORT TERM: stocks open slightly lower on good inflation report
Overnight the Asian markets were mixed, but China’s SSEC posted another all time high. Europe came in 0.55% higher, but our stock index futures were mixed going into the opening. At 8:30 the March Core PCE was reported flat, lowering the trailing twelve month inflation level to 2.1%. Consumer spending was also reported to have contracted somewhat. Stocks opened slightly lower as the SPX pulled back to 1492. Bonds rallied on the news up over 1/2 point, Crude is 50 cents lower, Gold down 60 cents, and the Euro is lower. At 10:00 the Chicago PMI recorded a more than expected decline, but still displaying manufacturing expansion in the region. U.S. Construction spending was also reported mixed. Short term momentum has worked off its overbought status and is now neutral to negative, but not oversold. Commercials continue to maintain their long positions from the mid-March lows, as Speculators remain short, despite new highs: see COT chart. Also, the FED did a massive Repo last wednesday, highest I’ve seen in quite a while: see FOMO chart. Short term, the SPX may now be ready to edge higher in Micro wave 3, support is at SPX 1489. Best to your trading.
MEDIUM TERM: bullish, still targeting SPX 1530
LONG TERM: bullish.