SHORT TERM: quiet options expiration, DOW -20
Overnight the Asian markets were mostly lower losing -0.4%. European markets opened higher and gained 0.3%. US index futures were higher overnight. At 8:30 the CPI was reported higher: +0.4% vs +0.2%, and at 9:15 Industrial production was again reported flat at 0.0% change. The market opened higher at SPX 1404, pushed to 1406 in the opening minutes, and then started to pullback. At 10:00 Consumer sentiment was reported lower: 74.3 vs 75.3. The pullback found support at SPX 1401 by 10:30, and then entered a trading range between 1401 and 1406. At the close the SPX ended at 1404.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.05%. Bonds lost 7 ticks, Crude gained $2.15, Gold added $2, and the USD was lower. Support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum had a negative divergence and declined to neutral. Today the WLEI was reported higher 48.6% vs 47.9%.
The market opened to the upside, made a new uptrend high, then went into a trading range for the rest of the day. The initial resistance level at SPX 1407, (0.618 wave 1), appears to be holding for now. Today had another small pullback, which has been the pattern for the past 8 trading days. We still look for a more substantial pullback before labeling this rally from SPX 1340 as a first of five waves up from that low. Short term support remains at the 1386 and 1372 pivots. Overhead resistance at SPX 1407 and the 1440 pivot. Short term momentum continues to display a negative divergence. Enjoy the weekend!
MEDIUM TERM: uptrend new high SPX 1406
LONG TERM: bull market