SHORT TERM: market heads lower then bounces, DOW -26
Overnight the Asian markets were -0.8%. European markets opened lower but closed mixed. US index futures were higher overnight, then started to weakend after a few economic reports. At 8:15 the ADP index was reported higher: 133K vs 119K, but lower than expected. At 8:30 Q1 GDP was reported in line with expectations but lower: +1.9% vs +2.2%, and weekly Jobless claims were higher: 383K vs 370K. The market opened one point higher than yesterday’s close at SPX 1314. As it started to pullback the Chicago PMI was reported lower at 9:45: 52.7 vs 56.2. The pullback continued until about 11:30, when Europe closes, and the SPX hit 1299. Then quite oversold it started to rally. By 1:00 it hit SPX 1315, pulled back to 1308 by 2:00, and then moved higher again. Around 3:30 the SPX hit 1320, and then dropped to 1310 at the close. Wild day!
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.40%. Bonds gained 10 ticks, Crude lost $1.30, Gold slipped $2, and the USD was higher. Support for the SPX drops to the 1303 and 1291 pivots, with resistance now at the 1313 and 1363 pivots. Short term momentum bounced to neutral during the rally. Tomorrow, the monthly Payrolls report at 8:30, along with Personal income/spending and PCE prices. Then at 10:00 ISM manufacturing and Construction spending. Also monthly Auto sales will be reported tomorrow.
The market opened a bit higher today then quickly sold off to SPX 1299. This level is two points above last wednesday’s 1297 low, and seven points above the previous friday’s 1292 low. The market appears to be trying to form a base in the SPX 1290’s. After the close yesterday we updated the SPX hourly chart to what we feel is the current count of Major wave 4. Remember Int. A took the form of a failed flat from SPX 1422-1359. Then we had the Int. B was rally to SPX 1415. Now Int. C, although twice as long as Int. A, appears to be trying to form a similar type of flat bottom. The OEW 1291 pivot appears to be important support.
Short term support is at the OEW 1303 and 1291 pivots, with overhead resistance at the 1313 pivot and SPX 1324/28. Short term momentum ended at neutral. The short term OEW charts remain with a negative bias with SPX 1318 now the swing point. Best to your first of the month trading tomorrow!
MEDIUM TERM: downtrend trying to bottom
LONG TERM: bull market