SHORT TERM: after a gap down opening, stocks close mixed
The market gapped down at the opening this morning as the DOW lost 100 points in the first five minutes of trading. When the SPX found some support at 1451 the market started to recover as the tech sector rallied. By 12:00 the market hit its highs for the day as the SPX hit 1468. After that the market seemed to stair step down into the close. At the close the SPX/DOW were -0.40%, and the NDX/NAZ were +0.25%. Bonds closed nearly 1/2 point higher, Crude was flat, Gold lost $2.50, and the Euro was lower. The SPX has made several attempts over the past two days to penetrate the long term pivot at 1462. Today’s high of 1468 did not hold, and the market closed under the 1462 pivot, at 1458. Therefore, resistance remains at 1462 and then 1484, and support at 1438 and then 1410. Short term momentum displays a slight negative RSI divergence at the highs this morning, while the techs were extremely overbought. Momentum has eased back some since those levels were hit, and is about at neutral now. This market is beginning to remind me of the market in June, when the cyclicals wanted to correct, but the techs continued to rally. When the techs finished their rally then, a double bottom was put in place for the cyclicals. Tomorrow is the end of the month, and the friday before a 3-day weekend. The July core PCE report is released at 8:30, along with several other reports during the day. And, FED chairman Bernanke will give a speech about Housing and Monetary policy in Wyoming at 10:00. Should be an interesting day!
MEDIUM TERM: correction
LONG TERM: bullish.