SHORT TERM: OEW 1058 pivot remains resistance, DOW +5
Overnight all the Asian markets were lower. Europe opened lower but closed +0.35%. US index futures were lower overnight and at 9:00 Case-Shiller housing prices were reported positive: +4.2 % v +4.6%. The market opened lower at SPX 1046 and immediately retested support at 1041 in the first few minutes. At 9:45 the Chicago PMI was reported lower: 56.7 v 62.3. The market started to rally. At 10:00 Consumer confidence was reported higher: 53.5 v 50.4. The market hit SPX 1054 around this time and started to pullback. By 11:00 the SPX found short term support at 1049 and then tried to rally again. Around noon the SPX hit its high for the day at 1055 and started to pullback again. At 2:00 the FED released the FOMC minutes: http://www.federalreserve.gov/monetarypolicy/fomcminutes20100810.htm. The market bounced a couple of points and then headed lower. At 3:00 the SPX hit 1044 and then rallied some into the close to end the day at SPX 1049.
For the day the SPX/DOW were +0.05%, and the NDX/NAZ were -0.25%. Bonds gained 14 ticks, Crude lost $2.90, Gold rallied $10.00, 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 was extremely oversold this morning, rallied to neutral, and then stayed within that range into the close. Tomorrow, the ADP employment index at 8:15, Construction spending and ISM manufacturing at 10:00, then monthly Auto sales in the afternoon. We also have a Senate testimony and then a speech by FED members tomorrow. FED general council Alvarez gives Senate testimony at 9:00, then FED governor Duke gives a speech at 10:45.
The market retested the OEW 1041 pivot early this morning and then tried to rally. This was the third test of this pivot in the past five trading days. The market then tried to rally in the morning, but the rise did nothing for the short term OEW charts – they remain negative. With market weakness since the second week of August it will not take much more downside to confirm an OEW downtrend. The DOW count is looking more and more probable every day. Important trend support remains at the OEW 1041 pivot. A break of this pivot and the downtrend will likely be confirmed. Resistance remains, as it has for six trading days, at the OEW 1058 pivot. Best to your trading!
MEDIUM TERM: uptrend in serious jeopardy
LONG TERM: bull market