SHORT TERM: market continues to go sideways, DOW +4
Overnight the Asian markets were all higher. Europe opened lower and closed -0.55%. US index futures were lower overnight, and at 8:30 Durable goods orders were reported at +4.9% v -1.3%. Despite the news the market opened lower at SPX 1025 and traded down to 1022 by 10:00. At that time New home sales were reported at 433K v 395K. The market then rallied on the news to its best level of the day at SPX 1032 by 10:30. From that high the market worked its way lower to SPX 1023 by 1:30 and then continued to stay within opening SPX 1022-1032 range right into the close. For the day the SPX/DOW were flat, and the NDX/NAZ were mixed. Bonds were up 6 ticks, Crude slipped 65 cents, Gold added $1.00, and the Euro was lower. Support for the SPX remains at 1018 and then 990, with resistance at 1041 and then 1061. Short term momentum was a bit oversold at the lows and moved up to neutral for the rest of the day. Tomorrow, the weekly Jobless claims and the first Q2 GDP revision at 8:30.
After the SPX 1036 high on monday the market immediately pulled back to 1022. The rally on tuesday slightly exceeded monday’s high with a SPX 1038 print. This could have ended the fifth wave up from SPX 979. Today, however, the market retested that SPX 1022 low, rallied to 1032, and then traded between those levels for the rest of the day. Since the move to SPX 1038 only exceeded the previous high by two points, and it was sandwiched between two SPX 1022 prints, we’re not convinced that the fifth wave has completed yet. The move from monday’s SPX 1036 to today’s 1022 low might have finished the 4th wave, with the 5th yet to come. Expecting thursday to provide us with the answer. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bear market