SHORT TERM: market pulls back after recent gains, DOW -180
Overnight the Asian all up streak ended at one day, they were mixed. Europe opened lower and closed -1.15%. US index futures were higher overnight and at 8:30 Durable goods orders came in negative: -0.1% vs +4.1%. The market opened higher at SPX 1177, then rallied to 1185 by 10:00. The SPX had closed at 1175 yesterday. After hitting what turned out to be the high for the day the market started to pullback. Around 11:00 the SPX hit 1169 and tried to rally. The rally hit SPX 1180 by 12:00, and then another pullback followed. By 2:00 the SPX hit 1159, bounced to 1167 by 3:00, and then headed lower again. Nearing the close the SPX hit 1150 and closed at 1151.
For the day the SPX/DOW were -1.95%, and the NDX/NAZ were -1.80%. Bonds gained 7 ticks, Crude lost $3.70, Gold dropped $45.00, and the USD was higher. Support for the SPX drops to 1146 and then 1136, with resistance at 1168 and then 1176. Short term momentum hit oversold near the lows. Tonight, a speech from FED chariman Bernanke at 5 PM. Tomorrow Q2 GDP and weekly Jobless claims at 8:30, then Pending home sales at 10:00.
The market opened slightly higher today, rallied, and then took out yesterday’s SPX 1170 low. After yesterday’s SPX 1196 high, the market has been working its way lower, Bernanke speaks after the close, with only one overlap thus far. The pullback late yesterday afternoon was started by the financials, and they remained weak today. The short term OEW charts turned to a negative bias today, and would require a rally back above the OEW 1168 pivot to turn positive again.
If we count last week’s double top at SPX 1220 as a failed C wave of an inverted flat (SPX 1231-1136-1220). Then the decline to SPX 1114 could be counted as a Minor wave 1. The rally to yesterdays’ SPX 1196 high could have ended Minor wave 2. We posted two tentative green labels to that effect on the SPX hourly chart this afternoon. With FED chairman Bernanke speaking after the close we could be witnessing another sell the FED comments reaction. Short term support is at the 1136/1146 pivots with resistance at the 1168/1176 pivots. Best to your trading!
MEDIUM TERM: downtrend low at SPX 1102
LONG TERM: bear market highly probable