SHORT TERM: market continues in narrow range, DOW -2
Overnight all the Asian markets were higher. Europe opened higher and closed +0.40%. US index futures were higher overnight and at 9:00 Case-Shiller reported housing prices flat: +0.0% v +0.8%. The market opened slightly higher moving back to the uptrend high at SPX 1130. After a pullback to SPX 1128 by 10:00 Consumer confidence was reported at 52.9 v 50.6. Another rally attempt to new highs ended again at SPX 1130 and then the market pulled back. By 12:30 the SPX had dropped only four points to 1126, and then drifted higher before closing at the low. Starting last tuesday Dec 22nd the entire daily range as been 6 SPX points or less. It has been a very quiet trading holiday season. For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.20%. Bonds were up 5 ticks, Crude lost 5 cents, Gold was $8.00 lower, and the USD was higher. Support for the SPX remains at 1107 and then 1090, with resistance at 1133 and then 1168. Short term momentum was slightly overbought and then stayed around neutral for the rest of the day. Tomorrow the Chicago PMI will be reported at 9:45.
The wave three rally may have ended with today’s retest of the SPX 1130. There are negative RSI divergences on the short term charts. Should the SPX decline below yesterday’s 1124 low, then that is likely the scenario. Best to your trading and happy holidays!
MEDIUM TERM: uptrend
LONG TERM: bear market rally