SHORT TERM: gap down opening, DOW -158
Overnight the Asian markets gained 0.5%. Europe opened higher but lost 0.9%. US index futures were lower overnight, and the market gapped down at the open to SPX 1411. The SPX had closed at 1418 yesterday. At 9:45 the Chicago PMI was reported higher: 51.6 vs 50.4. Then at 10:00 Pending home sales were reported higher: +1.7% vs +5.2%. Just after 10:00 the SPX hit 1406 and began to rally. Then just before 11:00 the SPX hit 1416 and began to pullback again. Heading into the close the SPX hit 1402 and closed there.
For the day the SPX/DOW were -1.15%, and the NDX/NAZ were -0.95%. Bonds gained 3 ticks, Crude slipped 5 cents, Gold lost $7, and the USD was higher. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Last night the FED reported a decline in the Monetary base: $2.633 tln vs $2.668 tln, but an increase in New home prices: $299.7K vs $272.2K. Today the WLEI was reported higher: 55.4% vs 54.6%.
The market gapped down at the open today, tried to rally back to yesterday’s close, then ended the day at the low of this decline: SPX 1402. This is not a good sign heading into the new year. We continue to observe an impulsive decline from SPX 1448, after the uptrend failed twice in the 1434-1462 inflection range. Some US sectors are starting to look bearish, as well as, some SPX sectors. While the economy looks fine, at the moment, the markets are suggesting there is potential trouble ahead. More on this in the weekend report.
Short term support drops to SPX 1402/03, 1396/98 and the 1386 pivot, with resistance at SPX 1413/16, 1422/27 and the 1440 pivot. Short term momentum ended the day slightly oversold. The short term OEW charts remain negative, with the swing level at SPX 1421. Best to your weekend!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull/bear inflection point