SHORT TERM: market settles lower before three day weekend, DOW -122
Overnight the Asian markets were mostly higher. Europe opened higher but closed mixed. US index futures were generally flat overnight, and at 8:30 Personal income was reported positive +0.4% v +0.4%, while Personal spending was reported flat: 0.0 v +0.6%. The market opened about unchanged at SPX 1102 but dipped to 1096 within the first few minutes. At 9:45 the Chicago PMI was reported slightly lower: 59.7 v 63.8. Then at 10:00 Consumer sentiment was reported slightly higher: 73.6 v 73.3. Also at 10:00 the SPX had rallied back to 1102 and that was the high for the day. As the market started to pullback from an overbought short term momentum level the FED started issuing press releases: http://www.federalreserve.gov/newsevents/press/monetary/20100528b.htm. At 11:00 the Fed issued this: http://www.federalreserve.gov/newsevents/press/monetary/20100528a.htm. The SPX hit 1093 around 11:30 and tried to rally but could only make it back to 1098 by 12:30. The FED, in the meantime had issued this: http://www.federalreserve.gov/newsevents/press/bcreg/20100528a.htm. The market continued to work its way lower until 2:00 when the SPX hit 1085. Then after what appeared to be a successful test of the 1090 pivot the market rallied. By 3:30 the SPX neared 1100 only to retreat again in the last hour hour to close at 1089.
For the day the SPX/DOW were -1.20%, and the NDX/NAZ were -0.75%. Bonds gained 11 ticks, Crude slipped 50 cents, Gold added $1.00, and the USD was higher. Support for the SPX drops down to 1058 and then 1041 again, with resistance at 1090 and then 1107. Short term momentum was overbought at the open and declined for most of the day. The weekly LEI figures came in lower again this week, but still in the expansionary mode: 55.1% v 59.0%. Consumer sentiment rose slightly to 38.6% from 38.3% bullish, still basically bearish.
This week was filled with lots of wild swings and friday was no different. After hitting the Major wave 4 support level (SPX 1041 pivot) on tuesday the market rallied. The SPX appeared to clear the downtrend swing pivot at 1090 yesterday when it closed at 1103. Today, however, it closed under that pivot again. Since SPX 1103 is within the range of the 1107 pivot this is likely to be important resistance heading into next week. Best to you and yours this holiday weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market