SHORT TERM: new uptrend high then pullback, DOW -47
Overnight the Asian markets were mixed. Europe opened higher but closed -0.35%. US index futures were lower overnight. At 8:30 the Q2 GDP revision came in slightly better than expected: +1.7% v +1.6%, and the weekly Jobless claims improved: 453K v 465K. Futures started to rally and the market gapped up at the open to SPX 1149, it had closed at 1145 yesterday. The rally continued until about 10:00 when the SPX hit 1157, a new uptrend high. That was the high for the day as the market started to pullback quickly after that. Also around 10:00 the Chicago PMI was reported higher: 60.4 v 56.7, and FED chairman Bernanke gave his Senate testimony which was released last night: http://www.federalreserve.gov/newsevents/testimony/bernanke20100930a.htm. The pullback continued until around noon when the SPX hit 1136, right at the OEW pivot. Then the market tried to rally in this interesting and volatile day. At 11:00 the FED issued the following press release: http://www.federalreserve.gov/newsevents/press/other/20100930a.htm, and at 1:00 this press release: http://www.federalreserve.gov/newsevents/press/monetary/20100930a.htm. As the market tried to work its way higher FED chairman Bernanke’s speech was released at 2:30: http://www.federalreserve.gov/newsevents/speech/bernanke20100930a.htm. At 3:00 the rally stalled at SPX 1145 and the market pulled back to close at 1141.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.45%. Bonds lost 4 ticks, Crude rallied $2.00, Gold slipped $1.00, and the USD was higher. Support for the SPX remains at 1136 and then 1107, with resistance at 1146 and then 1168. Short term momentum hit slightly overbought this morning then turned lower. Tomorrow, Personal income/spending along with PCE prices at 8:30. At 10:00 the UofM Consumer sentiment, Construction spending and ISM manufacturing. Then monthly Auto sales in the afternoon. Lots of data on the first day of October.
Quite an interesting day. Last night we noticed the potential for a diagonal triangle ending to Minor wave one and posted that on the SPX hourly chart. The gap up this morning shot through the wedge being formed around the Major wave 3 high of SPX 1150. While we can not totally eliminate this possibilty, (Minor 1 SPX 1040 to 1157), under this count the third wave (SPX 1091 to 1127) becomes the shortest. Therefore we have removed the diagonal labeling and opted for an irregular Minute wave two correction (SPX 1132-1157-1136 thus far). The rest of the count remains the same. Since today’s pullback did not produce a short term oversold condition, it is possible it has not completed yet.
Received notice this week that Windows Live is being closed down Mar 2011, (been here five years), and all blogs are offered a complete transfer to Word Press. The link: http://caldaroew.spaces.live.com/ will continue to work until Mar 2011. This weekend I’ll ‘kick the tires’ at Word Press and make a decision. Thank you for your continued support these five years. We’ve certainly had some wild markets to say the least. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market