SHORT TERM: pullback continues, DOW -185
Overnight the Asian markets lost 0.1%. Europe opened lower and lost 0.2%. US index futures were lower overnight, but the market opened two points above yesterday’s SPX 1722 close. In the first few minutes the SPX hit 1725 then began to pullback. At 12:30 FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20130920a.htm. The pullback continued into the afternoon until the SPX hit 1709 at 3:30. The slight bounce ended the day at SPX 1710.
For the day the SPX/DOW were -0.95%, and the NDX/NAZ were -0.40%. Bonds gained 3 ticks, Crude lost $1.00, Gold dropped $37, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Last night the FED reported a new high in the Monetary Base: $3.546tln v $3.466tln. Today the WLEI was reported higher: 54.5% v 54.1%.
The market opened higher today, like yesterday. Then pulled back for most of the day, just like yesterday. No-taper euphoria gone already? The pullback from early Thursday’s 1730 high is now the largest one since the SPX 1641 low. This looks like an Intermediate wave iv pullback. It is already equal in length too Int. ii’s 21 point pullback. Since SPX 1710 was the breakout level, it should offer some support. But a pullback below SPX 1700 is also possible. After this pullback concludes the market should rally to new highs in Int. wave v.
Short term support is at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Short term momentum hit quite oversold today. The short term OEW charts remain positive with the reversal level now SPX 1702. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market