SHORT TERM: market opens lower, DOW -241
Overnight the Asian markets were mostly lower. Europe opened lower and closed -1.9%. US index futures were also lower overnight. At 8:30 Personal income (-0.1% vs +0.3%) and spending (+0.2% vs +0.8%) were reported lower. Also, PCE prices were lower +0.1% vs +0.2%. The market opened lower at SPX 1151, and then bounced around between the opening level and 1141 until 10:00. The SPX had closed at 1160 yesterday. At 9:45 the Chicago PMI was reported higher: 60.4 vs 56.5, and then at 9:55 Consumer sentiment was reported higher as well: 59.4 vs 57.8. The market then rallied to SPX 1153 by 10:30, pulled back to 1143 by 11:00, and hit the high for the day at 1154 around noon. After that it started a more sustained pullback. Heading into the close the SPX hit its lowest level of the day at 1131, and closed there.
For the day the SPX/DOW were -2.35%, and the NDX/NAZ were -2.65%. Bonds gained 10 ticks, Crude lost $3.45, Gold added $5.00, and the USD was higher. Support for the SPX drops to 1107 and then 1090, with resistance at 1136 and then 1146. Short term momentum bounced off the positive divergence yesterday, but now continues to move lower despite divergences. Last night the FED reported the M1-multiplier declined, but the Monetary base was higher. Today the WLEI was reported lower and now at a contracting 42.8%.
The market opened lower today following Europe’s lead. The European indices just experienced their sharpest decline since Q3 2008. The US market continued lower but found support between the OEW 1136/1146 pivots. After a rally into the mid-1150’s by 10:30 the market spent the rest of the day between that opening range until the last half hour of trading. The short term OEW charts remain negative and now require a rally into the 1168 pivot range to turn positive again. Short term support is at the low 1120’s and then the 1107/1090 pivot ranges. Short term resistance is at the 1136/1146 pivot ranges, and then the mid-1150’s. Short term momentum is starting to act like we’re in a third wave. Should be quite an interesting weekend update. Best to you and yours!
MEDIUM TERM: downtrend low at SPX 1102
LONG TERM: bear market highly probable