SHORT TERM: pullback continues on gap down opening, DOW -1
Overnight all the Asian markets were lower. Europe opened lower but closed mixed. US index futures were lower overnight, and at 8:30 Q2 GDP was reported +2.4% v +3.7%. The market gapped down at the open to SPX 1092. It had closed at SPX 1102 yesterday. Within minutes the SPX hit 1088, found support at the OEW 1090 pivot, and then started to rally. At 9:45 the Chicago PMI was reported higher: 62.3 v 59.1, and at 10:00 Consumer sentiment was reported higher as well: 67.8 v 66.5. The rally continued until about 10:30 when the SPX hit 1104. Then it started to drift lower. Around 2:00 the SPX hit 1095 and then turned higher. In the last hour of trading the SPX hit its best level of the day at 1106 and then eased back to close at 1102.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.15%. Bonds were up 23 ticks, Crude was up 55 cents, Gold rallied $15.00, 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 again touched oversold this AM, which it has been doing since tuesday. Overnight the FED reported the Adjusted Monetary Base pulled back some in the past two weeks. Today the WLEI slipped a bit further to 39.3% v 39.5%, and Public sentiment improved a bit to 32.8% v 31.5%.
Today’s gap down opening and then subsequent low at SPX 1088 created an overlap between the 1089 rally high for Minor wave 1 and this pullback. This suggests the rally from SPX 1065 to 1121, this week, was Minute wave one of Minor wave 3. We have noted this count on the SPX/DOW hourly charts. Reviewing the technicals of this July rally. We now have 8 of 13 foreign indices, 5 of 9 SPX sectors, the DOW/TRAN/NYA, and the NYAD (market breadth) all in confirmed uptrends. Expecting the other indices to join in this uptrend in early August. Best to your weekend!
MEDIUM TERM: DOW in confirmed uptrend, awaiting SPX
LONG TERM: bull market