SHORT TERM: post holiday rally fizzles, DOW -26
Overnight the Asian markets were all lower. Europe opened lower but closed +0.85%. Overnight US index futures were lower as well. At the open the SPX hit 1160 and began to rally. The market had closed at SPX 1162 on wednesday. By 10:30 the SPX hit 1173, another neutral reading on momentum, and began to pullback. The rest of the shortened trading day was to the downside. Heading into the close the SPX hit 1159 and closed there.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.75%. Bonds lost 19 ticks, Crude gained 30 cents, Gold slid $14.00, and the USD was higher. Support for the SPX remains at 1146 and then 1136, with resistance at 1168 and then 1176. Short term momentum rose off the positive divergence at the low, but ended negative. Today the WLEI was reported higher for the fourth week in a row: 42.7.
The market rallied early today after hitting another fibonacci retracement support level (61.8%) at SPX 1158. The actual low was SPX 1160. We have observed this kind of activity since the 38.2% retracement level (SPX 1210) was hit last thursday. Then the market rallied 15 points: SPX 1209-1224. After the next fibonacci retracement level (50.0%) at SPX 1184 was hit on monday, the market also rallied 15 points: 1183-1198. During all three instances the hourly RSI has failed to rise much above neutral after hitting a quite to extreme oversold condition. Until this pattern changes this decline will likely continue. The next fibonacci retracement level is at SPX 1126 (76.4%). Enjoy the weekend!
MEDIUM TERM: probable downtrend continues
LONG TERM: neutral