SHORT TERM: gap down opening, DOW -95
Overnight the Asian markets were mostly lower. Europe opened lower and closed -0.50%. US index futures were lower overnight and the market gapped down at the open to SPX 1190. The SPX had closed at 1198 on wednesday. Within the first few minutes the market traded down to SPX 1187. The market held support at the OEW 1187 and then tried to rally. By 10:30 the SPX had hit the upper range of this pivot at 1194, but then began to roll over again. A pullback to SPX 1189 followed. The market then bounced a bit but ended the session at SPX 1189.
For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -0.30%. Bonds gained 10 ticks, Crude slipped 5 cents, Gold dropped $15.00, and the USD was higher. Support for the SPX remains at 1187 and then 1176, with resistance at 1222 and then 1240. Short term momentum was getting oversold near the close. The WLEI continues to improve: 46.9% vs 45.5%.
The US market continues to struggle with a rising USD and the ongoing european debt crisis. Since the uptrend high on Nov 8th the market has experienced 8 gapped openings in the 12 trading days, (6 down, 2 up). Normally, this would suggest a downtrend was unfolding. Yet, despite the six gap down days the market had pulled back from SPX 1227- 1173 and now has a series of rising lows. We have marked the SPX hourly chart with a rising trendline from the 1173 low. This type of activity looks more like a triangle wave 4 formation, or a failed flat, which fits the Intermediate wave four wave count. The seasonally positive NDX/NAZ sectors have been supporting the general market and are leading. The SOX index, (semiconductors), even made a new uptrend high on wednesday. The weekend update will reveal any additional findings. Best to your weekend!
MEDIUM TERM: uptrend high SPX 1227
LONG TERM: bull market