wednesday update

SHORT TERM: market pullback extends, DOW -44

Overnight the Asian markets lost 1.0%. European markets opened lower and lost 2.1%. US index futures were lower overnight, and the market opened one point under yesterday’s SPX 1442 close. Right after the open the market resumed its pullback. At 10:00 New homes sales were reported about unchanged: 373K vs 372K. The decline accelerated after 10:00, and the SPX broke through the OEW 1440 pivot range hitting 1431 by 10:30. Then with an extremely oversold condition the market tried to rally. Around 1:30 the SPX reached 1439, then pulled back into a 1433 close.

For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.90%. Bonds gained 14 ticks, Crude slid $1.40, Gold dropped $10, and the USD was higher. Medium term support now drops to the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow, Q2 GDP (est. +1.7%) plus weekly Jobless claims and Durable goods orders at 8:30. Then Pending home sales at 10:00.

The market opened slightly lower today, then continued yesterday afternoon’s selling. Within the first hour of trading the SPX broke through the OEW 1440 pivot range, (SPX 1433-1447), then made a low at SPX 1431. This Intermediate wave iv pullback has now extended to 44 points from the SPX 1475 high. A bit more than expected but still acceptable. Intermediate wave ii had a 54 point pullback. Currently this market is trading in between the recent Minute wave iii and iv range of Minor wave 5 (SPX 1429-1439).

Short term support is at SPX 1422/27 and 1413/16, with resistance at the 1440 pivot and SPX 1463/64. Short term momentum hit extremely oversold today then bounced a bit. A  lower low tomorrow could set up a tradeable positive divergence. The short term OEW charts remains negative from SPX 1456, with the swing point now SPX 1451. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp