SHORT TERM: market rallies from slightly oversold levels, DOW +37
Overnight most of the Asian markets were lower. Europe opened lower and closed -0.65%. US index futures were flat overnight, and at 8:30 the first revision of Q2 remained unchanged at -1.0%, and the weekly Jobless claims were 570K v 580K. The market opened relatively flat at SPX 1027 and then dropped to 1016 by 10:00. That was the low for the day, right at the OEW 1018 pivot. As the market started to rebound from a slightly oversold short term momentum level the SPX rallied to 1025 by 12:30, and then paused for about an hour with only a 2 point pullback. The SPX then started to rally again when the USD/Bonds dropped. By 2:30 the SPX hit 1033 then eased back some into the close. For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.20%. Bonds lost 5 ticks, Crude gained $1.40, Gold added $4.00, and the Euro was higher. Support for the SPX remains at 1018 and then 990, with resistance at 1041 and then 1061. Short term momentum was oversold early and was nearly overbought late. Tomorrow, Consumer spending and Personal income at 8:30, then Consumer sentiment at 10:00.
Today’s drop to SPX 1016 helped to confirm five waves up from SPX 979 to 1038. The 22 point pullback was larger than the typical 13-16 point pullbacks during this uptrend and closer to the recent 39 point pullback Intermediate wave B. Today’s rally, however, to SPX 1033, now places the potential Primary wave B top scenario in a precarious situation. As it won’t take much on the upside to make a new uptrend high, and the OEW 1018 pivot was not broken on the downside. Therefore we repeat, as long as the OEW 1041 pivot holds (1049) the uptrend looks complete. If not, the 1061 pivot would be next on the agenda. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bear market