SHORT TERM: volatility in the forefront today again
Stocks gapped up at the open on a good core PCE report, and by 10:00 the SPX made the high for the day at 1518. After putting in a slight negative RSI divergence at the highs, the market started to pullback. By 12:30 the SPX had pulled back to support at 1505, and vacillated around that short term pivot for a couple of hours. When the buyers didn’t come in, the market broke lower to the next short pterm pivot at 1493. We’ve heard this tune many times over the past few weeks, as the market has remained in this trading range: 1480’s – 1540. By 3:30 the SPX hit 1494 and started to rally again. The volatility today was a full 200 point swing in the DOW: +100 to -100. We labeled the high at 1518 as wave A of another potential rising ABC pattern. If SPX 1493 does hold, this would be wave B, with another rally to follow going into next week. Short term momentum is now a bit oversold. At the close the market nearly completed the full round trip back to unchanged: the SPX/DOW were down 0.10%, and the NDX/NAZ finished mixed. Bonds had a big day up nearly one point, Crude gained 80 cents, Gold gained 90 cents, and the Euro was higher. Examining the action in the NDX, displays that it stayed within the range described this morning: 1900 – 1965. This morning it did get fairly close to making a new high: the previous high is 1948.58, today’s high 1497.00. That might have been it! But for now the same short term pattern applies here: an A wave up, B wave down, and possibly a C wave rally into early next week. If the NDX breaks through 1900, we’re most likely heading into a correction. Enjoy your weekend!
MEDIUM TERM: neutral
LONG TERM: bullish.