SHORT TERM: correction continues, DOW -121
Overnight the Asian markets dropped 1.4%. Europe opened higher, but lost 0.3%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported improving: 355K vs 363K, and the Trade deficit declined: -$41.5 bln vs -$44.2 bln. The market opened unchanged at SPX 1395, and rallied to 1401 in the opening minutes. Then, just as suddenly it started to pullback. The pullback continued into the afternoon, without hardly a 4 point bounce, and hit SPX 1381 by 1:30. Then with a positive short term divergence in place the market tried to rally. At 2:00 the SPX hit 1388, but then began to pullback again. Heading into the close the SPX dropped below 1381, and closed at 1377.
For the day the SPX/DOW were -1.10%, and the NDX/NAZ were -1.50%. Bonds gained 12 ticks, Crude added 55 cents, Gold rallied $14, and the USD was flat. Medium term support drops at the 1372 and 1363 pivots, with resistance now at the 1386 and 1440 pivots. Tomorrow: Export/Import prices at 8:30, then Consumer sentiment and Wholesale inventories around 10:00.
The market opened flat today, rallied to within 2 points of yesterday’s rebound high at SPX 1403, then rolled over and took out yesterday’s low at SPX 1388. At 1:30 the hit SPX 1381, within the OEW 1386 pivot range, and the market displayed a short term positive divergence. The market did rally to SPX 1388, but again headed lower breaking through the OEW 1386 pivot range at the close. This downtrend has now covered nearly 100 SPX points. The typical downtrend, for this degree of wave, is about 100 SPX points.
Short term support is now at the 1372 and 1363 pivots, with resistance at the 1386 and SPX 1396/98. Short term momentum is nearing extremely oversold. The short term OEW charts remain negative with the swing level now around SPX 1411. Best to your trading!
MEDIUM TERM: downtrend continues
LONG TERM: bull market