SHORT TERM: market starts lower rallies then, DOW -3
Overnight the Asian markets were mostly lower. Europe opened lower but closed +0.50%. US index futures were lower early overnight, but then started to recover. At 9:00 the Case-Shiller home price index was reported lower: -0.2% v -0.1%. The market gapped down at the open to a slightly lower downtrend low, but still at SPX 1090. In the first few minutes the market rallied to SPX 1095, and then retested the 1090 level by 10:00. At this time Consumer confidence was reported higher: 55.9% v 53.6%, and oddly enough, FHFA home prices were reported higher: +0.7% v +0.4%. The market then rallied to SPX 1099 by 10:30, pulled back to 1095 by 11:00, and continued higher to 1104 by 2:00. That was the high for the day as the market sold off rapidly into the close to finish the day at SPX 1092. For the day the SPX/DOW were -0.25%, and the NDX/NAZ mixed. Bonds were up 6 ticks, Crude dropped 75 cents, Gold was flat, and the USD was higher. Support for the SPX remains at 1090 and then 1061, with resistance at 1107 and then 1133. Short term momentum pulled back to slightly oversold from neutral early. Then rallied past neutral, then ended the day slightly oversold again. Tomorrow, at 8:30 New home sales, then at 10:00 a speech from A. Director Greenlee in GA. Around 2:15 the FED will release its statement from the two day FOMC meeting.
The ES (SPX) futures much lower overnight, making new downtrend lows, but recovered heading into the open. SPX cash traded at a slightly lower low than friday’s wave 3 low and then rallied before heading down again at the end of the day. If Minor wave 4 ended yesterday at SPX 1103 and today’s SPX 1090 low ended Minor wave 5, wave 5 was quite small in relation to Minor waves 1 and 3. Another view would be that Minor wave 4 ended at today’s SPX 1104 high and wave 5 is now underway. Our short term charts are giving mixed signals. A break of today’s daily range (SPX 1090-1104), either way, should determine which count is ongoing.
MEDIUM TERM: downtrend
LONG TERM: bear market