SHORT TERM: decline continues, DOW -61
Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.1%. US index futures were again lower overnight, and at 8:30 Durable goods orders were reported higher: +0.1% v -7.4%. The market opened one point above yesterday’s SPX 1697 close, then started to pullback. Just before 10:00 the SPX hit 1692 and started to rally. At 10:00 New homes sales were reported higher: 421k v 394k. At noon the SPX hit 1702, and then started to pullback again. Around 2:00 SPX 1692 was retested, then the market tried to rally. At 3:00 the SPX hit 1698, then pulled back to close at 1693.
For the day the SPX/DOW were -0.35%, and the NDX/NAZ were -0.25%. Bonds gained 10 ticks, Crude slid 80 cents, Gold gained $11, and the USD was lower. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow: Q2 GDP (est. +2.5%) at 8:30, along with the weekly Jobless claims. Then at 10:00 Pending home sales, and a speech from FED governor Stein.
The market opened slightly higher, but then immediately pulled back to the lower end of the OEW 1699 pivot range. The then market rallied ten points to SPX 1702. But oddly enough completely retraced that rally when retesting SPX 1692 at 2:00. The price action, since yesterday’s SPX 1708 high, has been uncharacteristic of this uptrend. During the advance from SPX 1627 to 1730, not one of the rallies was fully retraced. Today, both rallies from yesterday’s SPX 1695 low have been fully retraced. This is starting to look more like a correction than an ongoing uptrend. QE 2 GDP tomorrow could be a catalyst in either direction. Market needs to hold the lower end of the 1699 pivot range.
Short term support is at the 1680 and SPX 1654-1665, with resistance at the 1699 pivot and SPX 1730. Short term momentum is still displaying a positive divergence. The short term OEW charts remain negative with the reversal level still SPX 1702. Best to your trading!
MEDIUM TERM: uptrend getting erratic
LONG TERM: bull market