SHORT TERM: consolidation day, DOW +22
Overnight the Asian markets were all higher. Europe opened higher but closed mixed. US index futures were lower overnight. At 8:30 Personal income was reported higher: +0.1% vs -0.1%, Personal spending was reported higher: +0.6% vs +0.2%, and PCE prices were reported flat: 0.0% vs +0.1%. The market opened lower at SPX 1280 and continued to slip until it hit 1277 at 10:00. At that time Consumer sentiment was reported higher: 60.9 vs 57.5. The market then tried to rally but could only reach SPX 1286 by 11:30. After a pullback to SPX 1279 by 12:30 the market drifted higher in the afternoon. Nearing the close the SPX hit 1287, and then ended the week at 1285.
For the day the SPX/DOW were +0.10%, and the NDX/NAZ were mixed. Bonds gained 23 ticks, Crude slipped 55 cents, Gold dipped $2.00, and the USD was higher. Support for the SPX remains at 1261 and then 1240, with resistance at 1291 and then 1303. Short term momentum eased back from extremely overbought yesterday. Last night the FED reported a decline in the M1-multiplier, but an increase in the Monetary base. Today the WLEI ticked up a notch to 40.0% vs 39.9%.
The market opened lower today and pulled back below yesterday’s late hour reaction low at SPX 1279. Then after a rally to SPX 1286 the day was essentially over. Quite a narrow trading range after weeks and weeks of volatility. The VIX, which measures such things, is now at its lowest level since early August, a reading of 25, when the SPX stood fairly close to where it is today. The pullback, thus far, from the uptrend high of SPX 1293 has been 16 points. Would expect more follow through, on the downside, monday to complete this 20+ point pullback. Then another rally to complete the entire complex zigzag pattern from SPX 1075. Will cover the rest in the weekend update. Best to yours!
MEDIUM TERM: uptrend high SPX 1293
LONG TERM: bear market highly probable