SHORT TERM: gap down opening then rebound, DOW +20
Overnight the Asian markets were again mostly lower: -0.8%. European markets were again also mostly lower: -1.5%. US index futures were lower overnight. At 8:30 the final Q3 GDP came in as expected: +3.0%, and weekly Jobless claims were higher: 359K vs 348K. The market gapped down at the open to SPX 1398. It had closed at SPX 1406 yesterday. In the first few minutes of trading the SPX dipped to 1396, bounced to 1400, and then headed lower. Around 10:00 the SPX hit a new low for the pullback at 1392. Also around ten FED director Braunstein’s senate testimony was released: http://www.federalreserve.gov/newsevents/testimony/braunstein20120329a.htm. The market then tried to rally, hitting SPX 1396 by 11:00, but rolled over again. Around noon the SPX retested the day’s 1392 low, set up a short term positive divergence, and began to rally. Heading into the close the SPX hit 1405, then backed off to close at 1403.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.30%. Bonds gained 12 ticks, Crude dropped $2.20, Gold slipped $1.00, 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 set up a positive divergence, and then rose above neutral. Tomorrow, Personal income/spending at 8:30 along with PCE prices. At 10:00 the Chicago PMI and Consumer sentiment.
The market started the day with its first gap down opening since last thursday. Then, the market was setting up the Minor wave 2 low at SPX 1387 the following day. That pullback, overall, was 27 points. Today’s gap down, and continuation to SPX 1392, also creates a 27 point pullback from tuesday’s 1419 high. Both 27 point pullbacks, thus far, terminated with a short term positive RSI divergence. The first rally off last week’s low took about four hours, and was 12 SPX points. Today’s rally, off the noon low, took about fours hours and was 13 SPX points. Oddly similar. Are Bots running this market?
The pullback, despite being larger than expected, found support within the OEW 1386 pivot range. This pivot has provided support for three pullbacks now, over three consecutive weeks. One of the three potential short term wave patterns was eliminated today. The ominous D wave of an Intermediate 5th wave diagonal triangle. The other two, a Minute wave ii low and an irregular Minor wave 2 underway, remain a probability and possibility respectively. Short term support remains at the 1386 and 1372 pivots, with overhead resistance now at SPX 1406, 1414 and then 1419. Short term momentum displays a positive divergence. Best to your trading!
MEDIUM TERM: uptrend high SPX 1419
LONG TERM: bull market