SHORT TERM: first sizeable pullback since SPX 1398, DOW -51
Overnight the Asian markets lost 0.4%. European markets opened lower and lost 0.6%. US index futures were lower overnight, and the market opened lower at SPX 1462. The SPX had closed at 1466 on friday. By 10:00 the SPX had pulled back to 1458, then bounced to 1462 by 10:30, before heading lower again. At 11:00 the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20130107a.htm. At 1:30 the SPX hit 1457, then rallied to 1463 by 3:30, before closing at 1462 for the day.
For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.05%. Bonds gained 3 ticks, Crude added 10 cents, Gold dropped $10, and the USD was lower. Medium term support remains at the 1440 and 1486 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: Consumer credit at 3:00.
The market opened lower today, delivered its first 10 point pullback since SPX 1398, then hit 1457 before rallying. Since this is the largest pullback of the rally, which began last monday, we tentatively labeled friday’s SPX 1468 high as Minute wave i of Minor wave 3. This pullback should be Minute wave ii. After reviewing the short term activity from SPX 1398 to 1468, we noticed three areas of potential support. First SPX 1456/58, second SPX 1449, and third the OEW 1440 pivot range. Whichever level holds should lead to a Minute wave iii rally.
Short term support is at SPX the 1440 pivot and SPX 1422/27, with resistance at SPX 1462/64 and 1471/75. Short term momentum barely touched oversold today before rising past neutral. The short term OEW charts remain positive with the swing level now SPX 1445. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market