SHORT TERM: end of month pullback, DOW -15
Overnight the Asian markets were mostly higher +0.7%. Europe, however, opened higher and closed mostly lower -0.8%. US index futures were relatively quiet overnight. At 8:30 Personal income was reported higher: +0.4% vs +0.2% , Personal spending lower +0.3% vs +0.8%, and PCE prices were higher +0.2% vs +0.1%. The market opened one point lower than friday’s SPX 1403 close, and started to pullback. At 9:45 the Chicago PMI was reported lower: 56.2 vs 62.2. The pullback continued until 10:00 when the SPX hit 1395. After a rally attempt failed at SPX 1399 around 10:30 the market went into a narrow trading range. At 2:30 the market slipped lower to SPX 1394, then bounced to close at 1398.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.70%. Bonds gained 2 ticks, Crude slipped 10 cents, Gold added $4.00, 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 hit oversold after friday’s extremely overbought level. Tomorrow, ISM manufacturing and Construction spending at 10:00, then monthly Auto sales later in the day.
The market opened slightly lower today. Then had the largest pullback since tuesday’s rally began at SPX 1359. This helps confirm the five waves up to SPX 1407. Now the question arises; “Did the five waves up end a small impulse wave, or did it conclude the expanding diagonal triangle from SPX 1357?”. Right now the technical situation is just too complex to arrive at a definitive answer.
We have a potential Intermediate wave iv low at SPX 1359, without a new high yet to confirm. An expanding triangle from SPX 1357, without a sufficient break from the 1407 high to confirm. Then, at the same time, the DOW/NAZ have both been in confirmed downtrends versus the still uptrending, (or unconfirmed downtrending), SPX/NDX. Plus, market leader AAPL appears to be in its post earnings profit taking period. Overall we need more market data, and will let the market decide its next short term direction.
Short term support remains at the OEW 1386 and 1372 pivots. Short term resistance is at SPX 1407, 1414, and 1419. Short term momentum hit oversold today, then bounced back to neutral. The short term OEW charts remain with a positive bias from SPX 1380 with the swing point around the upper range of the 1386 pivot. Best to your trading!
MEDIUM TERM: DOW/NAZ confirmed downtrends, SPX/NDX have not
LONG TERM: bull market