SHORT TERM: choppy action continues as market pulls back, DOW -148
Overnight the Asian markets were mostly higher. Europe opened lower and closed -1.00%. US index futures were lower overnight, and at 8:30 Personal income weakened to -0.2% v +0.2%. Also, Consumer spending weakened 0.2% v 1.0%, and the PCE was flat 0.2% v 0.2%. Stocks gapped down at the open to SPX 822 and hit 816 by 10:00. At that time a Consumer sentiment reading was reported at 57.3 v 56.6. The market then rallied to its best levels of the day at SPX 825 by 12:00. Yesterday’s close was at SPX 833. Another pullback followed to a lower 813 by 2:00. An hour later the market had rallied to 822, but then again turned lower going into the close. For the day the SPX/DOW were -1.95%, and the NDX/NAZ were -2.50%. Bonds were off 9 ticks, Crude dropped $2.00, Gold lost $17.00, 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 stayed below neutral for most of the day.
Over the past two days the market action has become quite choppy. The rally to SPX 827 thursday morning was fine, but after that the choppy action was even noticeable during the rallies. We can draw two possible short term conclusions from this activity. The first being upside momentum is waning. Or the second, the market is going through a consolidation period, by forming an irregular correction with the thursday morning low (SPX 815), the thursday close high (833), and the friday low (813). There are some short term negatives divergences in place, so some caution is warranted here. Will review over the weekend. Best to your weekend!
MEDIUM TERM: market trying to confirm an uptrend
LONG TERM: bear market