SHORT TERM: stock rebound strengthens, DOW +8
Overnight the Asian markets were mostly higher. Europe opened higher but closed mixed. US index futures were higher overnight. At 8:30 Q1 GDP was reported unchanged: +1.8% vs +1.8%, but weekly Jobless claims were reported higher: 424K vs 409K. The market opened lower at SPX 1318, but bounced to 1321 in the first few minutes. The market had closed at SPX 1320 yesterday. By 10:00, however, the SPX had dropped to 1314. Another rally attempt fizzled by 10:30 at SPX 1319 and the market retested 1314 again by 11:00. After this the market started to rally. Around 2:30 the SPX hit 1329, then went into a four point trading range for the rest of the day, and closed at 1326.
For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.70%. Bonds gained 20 ticks, Crude lost $1.00, Gold slipped $4.00, and the USD was lower. Support for the SPX remains at 1313 and then 1303, with resistance at 1363 and then 1372. Short term momentum touched oversold early and then popped to overbought. Tomorrow, Personal income/spending and PCE prices at 8:30. Then at 10:00, Consumer sentiment and Pending home sales.
Eighty percent of the world stock indices we track are in confirmed downtrends. The three that are not will likely be confirmed shortly. Yes, it does appear the SPX has been in a downtrend since the first trading day in May. It hit the OEW 1372 pivot at SPX 1371 right after the bin Laden has been killed signal/news. When the SPX dropped below the 1344 in the first week of the month, and commodities dropped hard, we turned somewhat cautious short term. And, have remained that way throughout the month.
We are maintaining the current count on the SPX until we do get an OEW downtrend confirmation. Then we plan to update the charts to alternate count #1, posted on the DOW daily chart. More on this in the weekend update. Short term support is at SPX 1323 and then the 1313/1303 pivots. Resistance around SPX 1337 and then the 1363/1372 pivots. Best to your trading!
MEDIUM TERM: downtrend (unconfirmed) from SPX 1371, has likely been underway
LONG TERM: bull market