SHORT TERM: choppy market activity continues, DOW +55
Overnight the Asian markets gained 0.3%. European markest opened higher but closed mixed. US index futures were higher overnight. At 8:30 Q2 GDP came in as expected +2.5%, and weekly Jobless claims declined: 305k v 309k. The market opened at SPX 1697, four points above yesterday’s close, and continued to rally. At 10:00 Pending home sales were reported lower: -1.6% v -1.4%, and FED governor Stein’s speech was released: http://www.federalreserve.gov/newsevents/speech/stein20130926a.htm. A few minutes later the SPX hit 1704 and started to pullback. The pullback continued until 11:30 when the SPX hit 1694. After another rally attempt, this time to SPX 1700 by 1:30, the market pulled back again. By 2:30 the SPX had hit 1693, and bounced into a 1699 close.
For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.75%. Bonds lost 7 ticks, Crude added 25 cents, Gold dropped $10, and the USD was higher. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow: Personal income/spending and PCE prices at 8:30, then Consumer Sentiment at 10:00.
As we noted yesterday, the recent market action does not look anything we expected for an Int. wave iv. It does, however, look like the market is in correction mode or pullback back mode in a potential wave 2. As a result we have updated both the SPX and DOW charts to reflect both of these potentials. The DOW count, which is preferred 60/40, suggests Primary III topped at the recent high. The SPX count, which is possible, suggests the market is in an Int. wave ii pullback. This market seems to be caught in the middle again in yet another inflection point. We will just have to give it some time to sort itself out.
Short term support remains at the 1680 pivot and SPX 1654-1665, with resistance at the 1699 pivot and SPX 1730. Short term momentum continues to display a positive divergence, but this market has not gone anywhere yet. The short term OEW charts remain negative with the reversal level SPX now 1700. Best to your trading!
MEDIUM TERM: uptrend erratic
LONG TERM: bull market