SHORT TERM: market resumes downtrend after Q4 GDP report, DOW -148
Overnight the Asian markets were mostly higher. Europe opened lower and closed -1.50%. US index futures were choppy overnight, and at 8:30 the much awaited Q4 GDP report was released: -3.8% v -0.5%. Many were expecting, and still do, a Q4 GDP of -5.0%, revisions in the weeks ahead. The market opened higher on the news to SPX 852, right at the 848 pivot, and that was the high for the day. As the market started to pullback the Chicago PMI was reported at 33.3% v 35.1%, and then at 10:00 Consumer sentiment was reported at 61.2% v 61.9%. By 11:30 the market hit SPX 829 taking out yesterday’s low by a clear margin. From an extreme short term oversold level the market then started to rally. At 1:00 the SPX hit 841, and when it failed to even make it back to yesterday’s low the market turned lower again. After making a new low on the day at 827, another rally followed. At 2:30 the SPX hit 835, and then turned lower while hitting 822 going into the close. This market certainly looks like it has resumed its downtrend after the rally from SPX 804 to 878. For the day the SPX/DOW were -2.05%, and the NDX/NAZ were -2.00%. Bonds were down 8 ticks, Crude was flat, Gold rallied $24.00, and the Euro was lower. Support for the SPX remains at 789 and then 768, with resistance at 848 and then 912. Short term momentum was quite oversold at the close, with slight positive divergences. For the month the SPX/DOW were -8.7%, and the NDX/NAZ were -4.5%. Best to your weekend!
MEDIUM TERM: downtrend continues
LONG TERM: bear market