SHORT TERM: market opens lower, rallies, then fades, DOW -203
Overnight the Asian markets were down sharply, Europe opened lower but closed +1.2%. US index futures were under pressure overnight as SP made new contract lows. Coming off those lows and heading into the open the market still gapped down and hit 856. This is right around thursday’s and friday’s lows of 858 and 853 respectively. By 10:00 the market rallied up to 883 when new home sales were reported +2.7%. Inventories dropped 7.3% to 394K, the lowest in 4 years. While inventories in the past year have dropped 25.4%, the biggest twelve month drop on record. By 11:00 the market pulled back to 860 and then rallied again, hitting 894 by 1:30. After that it was all downhill. Nearing the close the SPX hit 846, its lowest level in over two weeks, stopping right at the 848 OEW pivot. At the close the SPX/DOW were -2.80%, and the NDX/NAZ were -2.85%. Bonds were up two ticks, Crude dropped $2.00, Gold was flat, and the Euro was lower. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum was heading lower into the close and nearing oversold levels. Tomorrow a Consumer confidence reading at 10:00, and more Congressional hearings about another economic stimulous package. The SPX 848 pivot remains an important support. Should it break the next level lower is at 789 right in the area of the fibonacci support levels mentioned over the weekend. Best to your trading!
MEDIUM TERM: downtrend low still at SPX 840
LONG TERM: bear market, still waiting for the low to this downtrend