SHORT TERM: pullback continues but stabilizes, DOW -42
Overnight most of the Asian markets were lower. Europe opened higher, but closed mixed. US index futures were higher overnight and at 8:30 Durable goods orders were reported at -2.4% v +4.8%. The drop was not expected. Around 9:00 the FED chairman Bernanke gave a speech in Congress: http://www.federalreserve.gov/newsevents/speech/bernanke20090925a.htm. At the open the SPX traded between 1049 and 1046 yesterday’s low. By 10:00, the market rallied to yesterday’s short term resistance at SPX 1053. Also at 10:00 New homes sales were reported at 429K v 426K, and Consumer sentiment was 73.5% v 65.7%. The market turned over on the news. Just past noon the SPX dropped below yesterday’s low, and by 1:30 the SPX hit the OEW 1041 pivot. At that time FED governor Warsh released his speech: http://www.federalreserve.gov/newsevents/speech/warsh20090925a.htm. Holding the pivot the market started to rally. At SPX 1049 stoppend the market faded into a close at 1044. It’s lowest close in two weeks. For the day the SPX/DOW were -0.55%, and the NDX/NAZ were -0.85%. Bonds gained 11 ticks, (it gained every day this week), Crude added 15 cents, Gold dropped $8.00, and the Euro was slightly higher. Support for the SPX remains at 1041 and then 1018, with resistance at 1061 and then 1090. Short term momentum stayed oversold, then went extremely oversold at the low before turning slightly higher. The G-20 ends this weekend and reports should come forth over the next few days.
This Minor wave 4 pullback from SPX 1080 extended to 39 points at today’s low of 1041. Minor wave 2 was 47 points. On a very short basis, up to the hourly charts, the market is currently as oversold as it was at Minor wave 2. A rally back to the OEW 1061 pivot should turn short term momentum positive, and even resume the uptrend. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market