SHORT TERM: early morning rally fades, DOW -74
Overnight the Asian markets were mostly higher. Europe opened higher and closed +0.55%. US index futures were higher overnight as well, and at 8:30 the weekly Jobless claims improved: 473K v 500K. The market opened higher to SPX 1058, and then pulled back to 1055 by 10:00 where it had closed yesterday. Another rally attempt to break through the OEW 1058 pivot followed. Around 10:30 the SPX hit 1061 and became slightly overbought on the hourly chart. A pullback followed. At 2:00 the FED made the following press release: http://www.federalreserve.gov/newsevents/press/other/20100826a.htm. The pullback continued until about 3:00 when the SPX hit 1045. Again, at this point, another rally attempt followed. By 3:30 the SPX hit 1053, but rolled over to end the day at SPX 1047.
For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.15%. Bonds gained 11 ticks, Crude rose 80 cents, Gold slipped $2.00, and the USD was lower. Support for the SPX remains at 1041 and then 1032, with resistance at 1058 and then 1090. Short term momentum hit slightly overbought this morning and then declined to oversold. Tomorrow, the first revision to Q2 GDP at 8:30. Then a speech from FED chairman Bernanke, and the bi-weekly Consumer sentiment report at 10:00.
Early today the market continued its rally off of another positive setup yesterday morning at SPX 1040. Within the first hour or so of trading the SPX again failed to break through the 1058 pivot. A pullback followed into the mid 1050’s for a couple of hours. But when the market did not attempt a rally off of that consolidation it headed lower again. Short term OEW charts continue to be negative. A rally through the 1058 pivot would turn them positive. Important support remains at the 1041 pivot. Yesterday’s parameters remain. Best to your trading!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market