SHORT TERM: another gap down opening, DOW -48
Overnight the Asian markets were mostly lower. Europe opened higher but closed -0.30%. US index futures were lower overnight, and at 9:00 Case-Shiller reported housing price changes remain positive: +0.59% vs +1.70%. At the open the market gapped down to SPX 1179. It had closed at SPX 1188 yesterday. At 9:45 the Chicago PMI was reported higher: 62.5 vs 60.6. The market pulled back to SPX 1174, yesterday’s low, and then began to rally. At 10:00 Consumer confidence was reported higher: 54.1 vs 50.2. The market continued to rebound, hitting SPX 1184 by around 10:30. Another pullback followed to 1179 by 11:30, and then the market tried to rally again. Around 1:30 the SPX ran into the OEW 1187 pivot and that was the high for the day. A pullback form 1187 followed into a SPX 1181 close
For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -1.15%. Bonds gained 4 ticks, Crude lost $2.00, Gold rallied $22.00, and the USD was higher. Support for the SPX slips to 1176 and then 1168, with resistance at 1187 and then 1222. Short term momentum stayed around neutral for most of the day. Tomorrow, the ADP index at 8:15, Productivity at 8:30, ISM manufacturing and Construction spending at 10:00, monthly Auto sales in the afternoon, and then the FED’s beige book at 2:00. The FED has two speeches on the agenda for wednesday. At 9:10 FED vice chairman Yellen, and then FED governor Tarullo at 9:30. Busy day!
Today the market gapped down at the open for the fifth time in six trading days. This pattern goes back to monday of last week. One would have thought the market was in a confirmed downtrend, correcting the recent rally. Yet, the SPX is less than 2% lower from where this series of events began (SPX 1200-1181). Currently, five of the 15 world markets we follow are in confirmed downtrends. This compares to the six foreign markets that were in downtrends during the August pullback. If the US market is to remain in an uptrend, and start lifting these other markets, it has to start rising this week.
The SPX 1173/1174 level continues to provide support. This level coincides with the OEW 1168 and 1176 pivots. A breakdown below this level, and pivots, suggests further selling ahead and a likely downtrend confirmation: the DOW alternate count. A rally above the 1187 pivot and the 1199 level suggests a resumption of the uptrend is underway: the SPX main count. It’s time for this market to make the decison. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market