thursday update

SHORT TERM: lower open then a rally, DOW +16

Overnight the Asian markets gained 1.3%. Europe opened higher and gained 0.7%. US index futures were higher overnight. At 8:30 Q2 GDP was reported higher than expected: +2.5% vs +1.7%, and weekly Jobless claims were reported lower: 331k vs 336k. The market opened two points below yesterday’s SPX 1635 close, dipped to 1631, and then started to rally. Around 11:00 the SPX cleared yesterday’s 1641 high and hit 1646. Then it started to pullback again. At 3:30 the SPX hit 1637, then nudged up into a 1638 close.

For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.70%. Bonds gained 6 ticks, Crude lost $2.15, Gold slipped $8, and the USD was higher. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Tomorrow: Personal income/spending and PCE prices at 8:30, the Chicago PMI at 9:45, and Consumer sentiment near 10:00.

The market had another choppy day today. Opening at SPX 1633, dipping to 1631, rallying to 1646, declining to 1637, then closing at 1638 for a three point gain. When the SPX rallied early, we posted a comment on the blog. Reaffirming our closing statement yesterday and adding the SPX 1643 level. With the SPX hitting 1646 today we now have to consider the recent SPX 1627 low may have been the end of Int. wave A. We still prefer the Int. wave C underway scenario. But to remain objective we posted an alternate count on the DOW charts.

Thus far from Wednesday’s SPX 1627 low, the market has created an abc pattern: 1641-1631-1646 followed by this afternoon’s decline to 1637. This could be considered all of Minor wave b of Int. wave C, or part. Keep in mind Minor wave b of Int. wave A took quite a while to unfold in a triangular pattern.

Short term support remains at the 1628 and 1614 pivots, with resistance at SPX 1636-1640 and SPX 1648-1649. Short term momentum hit overbought today before dropping below neutral. The short term OEW charts remain negative with the reversal level now SPX 1650. Best to your trading on the last day of August.

MEDIUM TERM: downtrend

LONG TERM: bull market

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