SHORT TERM: lower open but rally continues, DOW +136
Overnight the Asian markets ended +0.1%. Europe opened lower but gained 0.3%. US index futures were lower overnight, and the market opened two points below yesterday’s SPX 1684 close. In the opening minutes the market ticked up to SPX 1683 then began to pullback. At 10:00 Wholesale inventories were reported higher: +0.1% vs -0.2%. Around 10:30 the market hit SPX 1679 and then began to rally. The rally lasted until 2:00 when the SPX hit 1688. Then after a pullback to SPX 1685 by 3:00, the market closed at 1689.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were -0.15%. Bonds gained 16 ticks, Crude added 35 cents, Gold ended flat, and the USD was lower. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots. Tomorrow: weekly Jobless claims plus Export/Import prices at 8:30, then the Budget deficit at 2:00.
The market opened slightly lower today, dipped a few points, and then broke through the OEW 1680 pivot range. Clearly this was more than expected for an Intermediate wave B rally. As noted yesterday, we now have to consider the recent downtrend of 5.7% in the DOW may have been all of Major wave 4. Previous DOW Major wave corrections have been 6.7% through 14.6%. So this does appear to be a bit short. But the weekly RSI did get sufficiently oversold, the daily RSI is quite overbought for a B wave, and the daily MACD has made a positive crossover. We posted this count on the DOW charts, while maintaining the Int. B count on the SPX charts. Since both counts are equally probable at this time we have an inflection point.
Short term support remains at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 pivot and SPX 1710. Short term momentum continues to display a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1665. Best to your trading!
MEDIUM TERM: downtrend inflection point
LONG TERM: bull market