SHORT TERM: market weakens early and late, DOW -51
Overnight all the Asian markets were lower. Europe opened higher and closed +0.15%. US index futures were lower overnight, and that 8:15 the ADP employment index was still negative: -23K v -24K. The market opened slightly lower then traded down to SPX 1166 by 10:00. At 9:45 the Chicago PMI was reported still expanding: 58.6% v 62.6%, and at 10:00 Factory orders were reported positive: +0.6% v +2.5%. The market held the SPX 1166 level after getting slightly oversold and began to rally. At 12:30 the speech by FED governor Duke was released: http://www.federalreserve.gov/newsevents/speech/duke20100331a.htm. Then around 2:30 the market topped out for the day at SPX 1175 and turned lower. Heading into the close the SPX hit 1167 but closed at 1169 above the 1168 pivot.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.50%. Bonds were up 8 ticks, Crude gained 85 cents, Gold added $8.00, and the USD was lower. Support for the SPX remains at 1168 and then 1146, with resistance at 1176 and then 1187. Short term momentum hit oversold early and ended just above oversold at the close. Tomorrow, weekly Jobless claims at 8:30, then ISM manufacturing and Construction spending at 10:00. In the afternoon monthly Auto sales will be reported. Friday, a holiday in the US, has the non-farm Payrolls report scheduled to be reported.
The recent choppy action from last thursday’s SPX 1181 high has been flipping back and forth between a short positive bias and a negative one. Action like this is corrective and has not been seen during this uptrend since its choppy beginning in early February. Also this choppy activity appears to be across all four major indices with the weakest being the DOW. Thus far, in the SPX the pullback had been 20 points from 1181 to 1161. This is the second largest pullback of the entire uptrend. The largest occurred in late February and was 26 points. With today being end of month/end of quarter and a holiday on friday we’re unlikely to get any definitive action until next week. Best to your trading in this holiday season.
MEDIUM TERM: uptrend
LONG TERM: bull market