SHORT TERM: pullback extends, DOW +19
Overnight the Asian markets lost 1.2%. European markets opened lower and declined 0.4%. US index futures we lower as well. At 8:30 weekly Jobless claims were reported flat: 382K vs 382K. The market gapped down at the open to SPX 1455 and continued lower until hitting 1450 around 10:00. At ten the Philly FED was reported improving: -1.9% vs -7.1%, but Leading indicators declined: -0.1% vs +0.4%. The market then started to rally. The rally continued to move higher throughout the day, hitting SPX 1461 around 3:30. Then after a slight dip to SPX 1458 the market closed at 1460.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.15%. Bonds added 3 ticks, Crude gained 70 cents, Gold slipped $3, and the USD was higher. Medium term support remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow is Options expiration day.
The market gapped down at the open today for the first time since the end of August. During the open the SPX gapped right below support at 1456 and continued lower to 1450. Then, with the market quite oversold short term, the SPX rallied 9 points over the next two hours. During the recent decline, from SPX 1475-1450, the largest rally was also 9 points. That occurred when the SPX first hit 1456 at the open on tuesday. The market then took nearly two full trading days just to rally that 9 points. This suggests SPX 1450, +/- a few points, may be an important level.
With the recent pullback of 25 points it appears Intermediate iii, of this Major wave 3 uptrend, completed at SPX 1475. The current decline should be part of Intermediate wave iv. When it concludes Intermediate wave v should take the market to new bull market highs. Fourth waves during this uptrend have been relatively minor pullbacks, and have taken the form of a triangle; i.e. Minor 4, and the two Minute iv’s. This would suggest the OEW 1440 pivot range, (SPX 1433-1447), should support this Intermediate wave iv pullback.
Short term support is at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum hit quite oversold this morning then bounced back to neutral. The short term OEW charts barely remained positive with the swing point now SPX 1452. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market