SHORT TERM: volatility continues, DOW +5
Overnight the Asian markets were mixed. Europe opened lower and closed -1.15%. US index futures were higher overnight but the market opened about unchanged: SPX 1096 vs. SPX 1095 close yesterday. Within the first few minutes the market started to pullback. At 10:00 New home sales were reported lower: 300K v 466K. The market continued lower until about 10:30 when the SPX hit 1085. At this point it was extremely oversold and had retraced 50% of the recent SPX 1042-1131 Intermediate wave A rally. From this low the market started to work its way higher as it awaited the FED’s FOMC statement at 2:15. Around 2:00 the SPX hit 1094 then started to back off. After the FED’s FOMC cautious statement: http://www.federalreserve.gov/newsevents/press/monetary/20100623a.htm. The market pulled back to 1089 and then spiked up to SPX 1100 in a matter of minutes. Another pullback followed to SPX 1088 by 3:00. Then the market bounced to SPX 1095 before closing at 1092.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.35%. Bonds were up 15 ticks, Crude lost $2.00, Gold dropped $3.00, and the USD was lower. Support for the SPX remains at 1090 and then 1058, with resistance at 1107 and then 1136. Short term momentum was extremely oversold at this morning’s low, and is still oversold. Tomorrow, weekly Jobless claims and Durable goods orders at 8:30.
Today’s early morning selling took the SPX down to the 50% retracement level, (see yesterday’s post), of the recent 1042-1131 Intermediate wave A rally. With an extreme short term oversold condition and holding at the OEW 1090 swing pivot the market then rallied. It’s certainly possible this was the low of Intermediate wave B. Nothing confirmed by the short term OEW charts yet, and the low may still get retested. However, as long as the OEW 1090 pivot range holds we should start to see higher prices soon. Looks like we’ll need to clear SPX 1100 to get the momentum going positive again. Best to your trading!
MEDIUM TERM: downtrend low at SPX 1041
LONG TERM: bull market correction