SHORT TERM: market consolidates after rough week, DOW -8
Overnight all of the Asian markets were lower. Europe opened higher but closed -0.90%. US index futures were relatively flat overnight, and at 8:30 the final revision to Q1 GDP was lowered: +2.7% v +3.0%. The market opened slightly higher to SPX 1177 but immediately turned lower. It had closed at SPX 1174 yesterday. Nearing 10:00 the SPX hit 1171 and then Consumer sentiment was reported higher: 76.0 v 75.5. Again the market attempted a rally but could only slightly exceed the opening high and hit SPX 1078 after 10:00. Another pullback followed into the low for the day at SPX 1068 by 11:00. Then the market staged its best rally of the week since the gap up opening on monday. Around 2:30 the SPX hit 1084, pulled back some, and closed at 1077.
For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds gained 7 ticks, Crude rallied $2.50, Gold added $9.00, and the USD was lower. Support for the SPX remains at 1058 and then 1041, with resistance at 1090 and then 1107. Short term momentum finally reacted to that positive divergence with todays rally and ended the day near neutral. The weekly LEI indicator dropped again this week to a contracting 43.1% vs 44.2%. Public sentiment rose: 41% vs 40.5%, but is still bearish.
The market slipped lower early in the day to SPX 1168. After that the financials fueled a somewhat muted general market rally following word before the open that Congress is moving forward on a bank reform bill: http://www.marketwatch.com/story/house-senate-panel-nears-sweeping-big-bank-reform-2010-06-25?siteid=bnbh. Today’s intraday rally was not enough to change the negative bias of any of the short term OEW charts. Enjoy the summer weekend!
MEDIUM TERM: downtrend low at SPX 1041
LONG TERM: bull market in correction