SHORT TERM: stocks open lower on weak economic numbers and stay lower, DOW -110
Overnight the Asian markets were mixed, and Europe came in -0.25%. US index futures traded lower overnight and into this morning when at 8:30 February durable goods orders were reported lower than expected at -1.7%. As a result the market gapped down at the opening. Then rallied into 10:00, when new home sales were reported at a 13 year low, down another 1.3% and 30% in the past year. The market immediately retreated to the lows for the day at SPX 1336. After that the market stayed within the opening range, basically vacillating around the 1344 EW pivot for the entire day. At the close the SPX/DOW were -0.90%, and the NDX/NAZ were -0.55%. Bonds gained about 6 ticks, Crude soared $4.95, Gold rallied $15.50, and the Euro was higher. Support for the SPX slips to 1327 and then 1316, with resistance at 1344 and then 1364. Short term momentum was overbought yesterday, touched oversold this morning, and is now at neutral. Tomorrow we have the weekly unemployment claims and a revision to 4Q GDP (+0.6%); plus a speech by FED governor Kroszner in DC all around 8:30.
After careful review of this rally thus far, we see no reason to change the current ABC structures on the SPX main count. A Major wave A can still be counted into the January 1270 low, and Major wave B may be taking the form of an irregular flat. Therefore, we have tentatively altered the count to display an Intermediate wave A completed at 1388, and an Intermediate wave B at the recent lows 1257, with Intermediate wave C, to complete Major wave B, now in progress. We still see significant resistance in the 1380 – 1400 area, with the SPX 1383 EW pivot as a potential high for this rally. Thus far the rally has hit 1360. Best to your trading!
MEDIUM TERM: rally from 1257 low still underway
LONG TERM: bear market