SHORT TERM: market drifts lower, DOW -16
Overnight the Asian markets were mostly higher. Europe opened higher, but closed -0.80%. US index futures were lower overnight, and at 8:30 weekly Jobless claims dropped under 400K for the first time in nearly two and a half years: 388K vs 420K. The market opened slightly lower at SPX 1259. It had closed at SPX 1260 yesterday. At 9:45 the Chicago PMI was reported higher: 68.6 vs 62.5 and the market drifted up to SPX 1261. Soon after the market started to drift lower. At 10:00 Pending home sales were reported positive: +3.5% vs +10.4%. The market continued lower until around noon when the SPX hit 1256. After that the market drifted higher until about 3:30 when it hit SPX 1260. Then it pulled back some to close at SPX 1258. Another quiet day.
For the day the SPX/DOW were -0.15%, and the NDX/NAZ were -0.20%. Bonds lost 60 ticks, Crude slid $1.70, Gold lost $8.00, and the USD was lower. Support for the SPX remains at 1240 and then 1222, with resistance at 1261 and then 1291. Short term momentum hit oversold this morning and then bounced. Tomorrow, WLEI and the weekly Monetary readings.
The market continued to trade in a narrow range today. The short term negative divergence in momentum yesterday has only generated seven SPX points to the downside (SPX 1263-1256). This pullback is similar to the previous two pullbacks of 6 and 8 points. Tomorrow is end of month, quarter and year. This might create some small volatility in the daily range. Last year, after a quiet two weeks, the market moved in the last hour of trading to complete a pullback. We could possibly get a repeat. Best to your trading!
MEDIUM TERM: uptrend high SPX 1263
LONG TERM: bull market