wednesday update

SHORT TERM: flat opening, dip, then rally DOW +48

Overnight the Asian markets lost 1.0%. European markets opened lower and lost 0.5%. US index futures were slightly lower overnight, but the market opened flat at SPX 1630. In the first few minutes the SPX dipped to 1627, and then began to rally. At 10:00 Pending home sales were reported lower: -1.3% vs -0.4%. The rally continued until 1:00 when the SPX hit 1641. Then after a pullback to SPX 1635 by 2:30 it tried to rally again. Around 3:30 the SPX hit 1640, and then pulled back again to close at 1635.

For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.40%. Bonds lost 14 ticks, Crude gained 40 cents, Gold was flat, and the USD was higher. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Tomorrow: Q2 GDP (est. +2.1%) and weekly Jobless claims at 8:30.

After a flat opening, and lower downtrend low, the market then staged a good rally from SPX 1627-1641. The rally was well overdue since the market was extremely oversold short term. Today’s rally, however, had difficulty breaking through the area from which it broke down: SPX 1638-1640. Should the market manage to clear this resistance area in the next few days, there would be a possibility that SPX 1627 was a, much discussed among some, Intermediate wave A low. If not, the market should continue on our projected Int. wave C down scenario.

Short term support remains at the 1628 and 1614 pivots, with resistance at SPX 1636-1640 and SPX 1648-1649. Short term momentum rose to neutral during the day. The short term OEW charts remain negative with the reversal level now SPX 1653. Best to your trading with tomorrow’s GDP number.

MEDIUM TERM: downtrend

LONG TERM: bull market

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