SHORT TERM: pullback continues, DOW -47
Overnight the Asian markets lost 1.5%. European markets opened lower and lost 1.9%. US index futures were lower overnight as well. At 8:30 weekly Jobless claims were reported higher: 362K vs 341K, and the CPI was reported flat: 0.0% vs 0.0%. The market gapped down at the open to SPX 1507 and continued to decline. The SPX had closed at 1512 yesterday. At 10:00 the SPX hit 1500, then started to rally. Also at 10:00 Existing home sales were reported lower: 4.92 mln vs 4.94 mln, the Philly FED was reported lower: -12.5 vs -5.8, but Leading indicators were reported positive: +0.2% vs +0.5%. The rally lasted for a half hour, and after the SPX hit 1506 it turned lower again. Around 2:30 the SPX had worked its way down to 1497, was extremely oversold, and then rallied. At 3:30 the SPX hit the opening level at 1507, then pulled back to end the day at 1502.
For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -1.05%. Bonds gained 10 ticks, Crude lost $2.30, Gold rallied $12, and the USD was higher. Medium term support for the SPX remains at the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots. Tomorrow: a panel discussion with FED governor Powell at 10:15, then a speech after the close from FED governor Tarullo.
The market gapped down at the open today for the first time since last thursday. After hitting SPX 1500 the market then bounced to 1506. Another push down found support at SPX 1497. Then the market rallied 10 points to SPX 1507 before easing into the close. The 30+ point pullback, (1531-1497), we had been expecting for Minor wave 4 has just occurred. Unfortunately our short term timing was off.
Today’s low found support at the recent cluster of lows from the end of Jan. to early Feb: SPX 1495, 1497, 1498. Today the market also hit a short term oversold level quite similar to the previous Minor wave 4’s in 2012. The decline, thus far from SPX 1531: 1500-1506-1497-1507-1501. While we can not rule out a retest, or slightly lower low, once the SPX rallies strongly through 1506 Minor wave 5, to new uptrend highs, is likely underway.
Short term support remains at the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term momentum hit extremely oversold today then ended the day oversold. The short term OEW charts remain negative with the reversal level now around SPX 1516. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market