SHORT TERM: no upside follow through, DOW -141
Overnight the Asian markets were all higher. Europe opened higher but closed -0.65%. US index futures were initially higher overnight and then turned lower. At 8:30 Personal income was reported higher: +0.2% v 0.0%, Personal spending was higher: +0.4% v 0.0%, and PCE prices nudged higher +0.1% v 0.0%. The market opened lower at SPX 1061, then traded up to 1064 by 10:00. That was the high for the day. The SPX had closed at 1065 on friday. The market then started to pullback in a quiet controlled fashion. The pullback continued throughout with only 3 or 4 point bounces, and the SPX closed near the lows at 1049.
For the day the SPX/DOW were -1.45%, and the NDX/NAZ were -1.65%. Bonds gained 32 ticks, Crude dropped 90 cents, Gold added $1.00, and the USD was higher. Support for the SPX drops to 1041 and then 1032, with resistance at 1058 and then 1090. Short term momentum declined from friday’s overbought, and hit oversold at the close. Tomorrow, Case-Shiller home prices at 9:00, the Chicago PMI and Consumer sentiment around 10:00, then the FOMC minutes at 2:00.
The market opened to the downside today, tried to rally, then broke through the neutral hourly RSI level. Was expecting this RSI level to hold if the market was going to continue friday’s double bottom SPX 1040 rally. Later in the day the SPX broke through the 1058 pivot range as well. Short term OEW charts have turned negative again and it appears the path of least resistance for this market is lower. The DOW alternate ABC Primary wave II count continues to rise in probability. Best to your trading!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market