SHORT TERM: gap down opening, DOW -42
Overnight Asian markets gained 0.1%. Europe opened lower and lost 0.5%. US index futures were lower overnight, and the market gapped down to SPX 1402 at the open. The SPX has closed at 1409 on friday. Within the first few minutes the SPX hit 1400, then bounced to 1404 by 10:00. Another pullback followed to SPX 1398 by 11:30. Then the market started to rally continuing higher into a SPX 1406 close.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were +0.40%. Bonds gained 7 ticks, Crude lost 50 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 1386 and 1373 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: Durable goods orders at 8:30, Case-Shiller at 9:00, then Consumer confidence and the FHFA housing index at 10:00.
The market gapped down today for the first time since November 13th. The market then had a meaningful pullback from Friday’s SPX 1409 high to today’s 1398 low. After that the market worked its way higher for the rest of the day. We can still count five waves up from the probable downtrend low at SPX 1343: 1361-1351-1390-1377-1409. Today’s pullback, while meaningful, was too short to conclude that the five wave structure has ended. A further pullback to below SPX 1390 is required. Or else, the recent five wave rally may extend higher.
Short term support remains at SPX 1402/03 and 1396/98, with resistance at SPX 1413/16 and 1422/27. Short term momentum declined from friday’s extremely overbought to just above neutral today. The short term OEW charts remain positive with the swing level now around SPX 1388. Best to your trading!
MEDIUM TERM: uptrend probably underway
LONG TERM: bull market