SHORT TERM: FOMC statement volatility continues, DOW -116
Overnight all the Asian markets were higher. Europe opened higher but closed -1.60%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported slightly lower: 470K v 478K, and Durable goods orders were higher: +0.3% v -0.4%. The market opened slightly higher to SPX 1100, yesterday’s high, and a couple of points above yesterday’s close. That was today’s high, as the market headed lower for the rest of the day. Around 10:30 the SPX hit the OEW 1090 pivot and tried to rally. After bouncing a few points the market turned lower and broke through yesterday’s SPX 1083 low. Around 11:30 the SPX hit 1078, the low for the day. Again the market tried to rally and this time made it back to SPX 1088 by 2:00. A small pullback followed to 1084 by 2:30, and then the market moved higher again hitting SPX 1091 around 3:30. Then it pulled back to close at SPX 1085. For the day the SPX/DOW were -1.15%, and the NDX/NAZ were -2.25%. Bonds were up 3 ticks, Crude added 15 cents, Gold was flat, and the USD was higher. Support for the SPX drops to 1061 and then 1041, with resistance at 1090 and then 1107. Short term momentum was only slightly oversold at today’s low. Tomorrow, first a speech from FED vice chairman Kohn at 8:15 at the FDIC. Then at 8:30 Q4 GDP along with the Employment cost index. Then at 9:45 Chicago PMI will be released, and at 10:00 Consumer sentiment.
The expected post FOMC volatility continued today, but it pushed the SPX to lower lows. Since the SPX did not get above the OEW 1107 pivot, it appears this downtrend is still in Minor wave 5 of Intermediate wave one. The Techs were certainly leading on the downside, and the NDX has joined the SPX/DOW in confirmed downtrends. Gold today, retested its december low and then bounced on positive divergences. If it has bottomed, as expected, it will need to rally strongly over the next severals days. Best to your trading!
MEDIUM TERM: downtrend makes new low at SPX 1078
LONG TERM: bear market