SHORT TERM: FED watch continues, DOW -1
Overnight the Asian markets gained 0.2%. Europe opened higher and gained 0.3%. US index futures were higher overnight and the market gapped up at the open to SPX 1692. Then after hitting SPX 1693 the market started to pullback. Earlier, at 9:00, Case-Shiller was reported higher: +12.2% vs +12.1%. At 10:00 Consumer confidence was reported lower: 80.3 vs 81.4. Odd, the UofM reported on Friday the highest consumer sentiment since 2007. The market continued to pullback, with small three point rallies, until 1:30, when the SPX retested yesterday’s low at 1682. After that the market started to rally. Nearing the close the SPX hit 1689, then pulled back to close at 1686.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.50%. Bonds lost 3 ticks, Crude slid $1.40, Gold slipped $3, and the USD was higher. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots. Tomorrow: the ADP index at 8:15, Q2 GDP (est. -0.7% to +1.1%) at 8:30, the Chicago PMI at 9:45, then the FOMC statement at 2:00. Should be an interesting day.
The market gapped up at the open today, made a slightly higher high than Friday’s SPX 1692. Then pulled back to retest yesterday’s SPX 1682 low. Thus far the market has rallied from the SPX 1676 Minor 4 low in two waves: 1692, then 1682-1693-1682. As a result the market has set itself up for either outcome tomorrow: taper or no taper. No taper, and these two waves can be counted as Minute i and ii of Minor 5. Taper, and they could be counted as Minute waves a and b of a Minor 5 diagonal triangle. Interesting setup.
Short term support is at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 and SPX 1717. Short term momentum displayed a negative divergence at today’s SPX 1693 high, then dropped below neutral. The short term OEW charts vacillated yet another day, ending positive, with the reversal level at SPX 1685. Best to your trading tomorrow!
MEDIUM TERM: uptrend
LONG TERM: bull market