wednesday update

SHORT TERM: lower low – then rally, DOW +83

Overnight the Asian markets gained 0.9%. Europe opened higher and gained 0.3%. US index futures were higher overnight, then were about flat heading into the open. At 8:15 the ADP index was reported lower: 118K vs 158K, Productivity was reported higher : +2.9% vs +1.9% at 8:30. The market opened unchanged at SPX 1407, bounced to 1411 in the first few minutes, then headed lower. At 10:00 Factory orders were reported positive: +0.8% vs +4.8%, and ISM services were reported higher: 54.7 vs 54.2. At 11:00 the pullback hit a new low at SPX 1398, was nearly extremely oversold short term, and then started to rally. At 12:30 the SPX hit resistance at 1416, pulled back to 1411 by 2:00, then tried to rally again. Just past 3:00 the SPX hit 1415, and then pulled back to close at 1409.

For the day the SPX/DOW were +0.40%, and the NDX/NAZ were -1.00%. Bonds gained 7 ticks, Crude lost 60 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: the ECB meets before the open, then weekly Jobless claims at 8:30.

The market rallied overnight, but only bounced after the open before heading to a new pullback low at SPX 1398. After that the market had its best rally since the recent SPX 1424 high. Rising to resistance at SPX 1416 before pulling back into the close. This morning we labeled the SPX 1398 low as a tentative Minute wave A, and this afternoon we labeled the 1416 high as a tentative Minute wave B. We would expect the last wave down of this pullback, Minute wave C, to be underway now. Should the market rally above 1416, SPX 1398 may have been the Minor wave 2 low. If not, and the market continues its pullback, we should see Minor wave 2 bottom within the OEW 1386 pivot range.

Short term support remains at SPX 1402/03 and 1396/98, with resistance at SPX 1413/16 and 1422/27. Short term momentum rose from quite oversold to nearly overbought, before ending the day at neutral. The short term OEW charts dipped negative then turned positive again with the swing level still at SPX 1407. Best to your trading!

MEDIUM TERM: uptrend probably underway

LONG TERM: bull market approaching inflection point

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