SHORT TERM: market gaps down, DOW -199
Overnight the Asian markets were mostly lower. Europe opened lower and closed -1.30%. US index futures were lower overnight, and at 8:30 Durable goods orders came in negative: -2.1% vs +2.1%. The market gapped down at the open to SPX 1326 and continued lower. At 10:00 Congressional testimony from FED director Van der Weide: http://www.federalreserve.gov/newsevents/testimony/vanderweide20110727a.htm.. The market continued to decline until it hit SPX 1311 around 10:30. Then with the market extremely oversold, short term, it tried to rally. Around 11:30 the SPX hit 1320. Another pullback followed to SPX 1313 and then the FED’s Beige book was released: http://www.federalreserve.gov/FOMC/BeigeBook/2011/20110727/default.htm. The market bounced a few points and then continued lower. Nearing the close the SPX hit 1303, then bounced to end the day at 1305.
For the day the SPX/DOW were -1.80%, and the NDX/NAZ were -2.60%. Bonds lost 9 ticks, Crude dropped $2.25, Gold slipped $6.00, and the USD was higher. Support for the SPX drops to 1303 and then 1291, with resistance now at 1313 and then 1363. Short term momentum ended extremely oversold. Tomorrow, weekly Jobless claims at 8:30, then Pending home sales at 10:00.
The market gapped down again, at the open, for the second time this week. The pullback from the recent SPX 1347 high is now at 44 points, and has nearly retraced the entire 51 point rally. Late in the day the market lost the important 1313 pivot, and touched the 1303 pivot just before the close. Short term support is at 1303 and then the 1291 pivot range. Resistance is now at the 1313 pivot range, then around 1330 and 1345. With the market extremely oversold we should get some sort of bounce soon. This uptrend continues to look quite choppy in the SPX and NAZ. But we have already had five waves up in the DOW (no new high) and NDX (new bull market high). Also all of our five potential long term counts are still active. The next few days could prove to be quite interesting. Best to your trading!
MEDIUM TERM: uptrend high SPX 1356
LONG TERM: bull market at inflection point