SHORT TERM: another gap down opening, DOW -129
Overnight the Asian markets lost 1.8%. European markets opened lower and lost 0.9%. US index futures were lower overnight as well, and the market gapped down to SPX 1676 at the open. The SPX had closed at 1692 on Friday. In the first few minutes the SPX hit 1675 then started to rebound. At 9:45 the Chicago PMI was reported higher: 55.7 v 53.0. The rebound continued into the afternoon as the SPX hit 1687 by 1:30. Then after a pullback to SPX 1678 by 3:30 the market bounced into a 1682 close.
For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.30%. Bonds gained 3 ticks, Crude slid 55 cents, Gold dropped $8, and the USD was lower. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow: ISM manufacturing and Construction spending at 10:00, along with monthly Auto sales during the day.
The market gapped down for the second day in a row. Today’s gap opening jumped over the 1680 pivot, but found support near the lower end and ran into resistance at the upper end of the range: 1673-1687. The decline from the recent SPX 1730 high has now reached 55 points. The largest pullback during the entire Nov12-May13 uptrend was 61 points. Recent market activity is certainly looking like a new downtrend. We labeled a tentative green ‘a’ and ‘b’ at the recent SPX 1692 and 1704 levels. The degree of waves is yet to be determined.
Short term support is at the 1680 pivot and SPX 1654-1665, with resistance at the 1699 pivot and SPX 1730. Short term momentum was quite oversold at today’s lows then bounced. The short term OEW charts remain negative with the reversal level now SPX 1692. Best to your ‘likely’ government shut down trading tomorrow.
MEDIUM TERM: uptrend continues to weaken
LONG TERM: bull market