SHORT TERM: volatile day, DOW -137
Overnight the Asian markets gained 1.0%. European markets opened higher but lost 0.3%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 308k v 305k. The market opened four points below yesterday’s SPX 1694 close and continued to decline. At 10:00 ISM services were reports lower: 54.4 v 58.6. Around noon the SPX hit a new low for this decline at 1670, then began to rally. Around 2:00 the SPX hit 1683, pulled back to 1676 by 2:30, bounced to 1682 by 3:00, then dipped to 1679 to end the day.
For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -1.15%. Bonds gained 6 ticks, Crude slid $1.05, Gold added $1, and the USD was lower. Medium term support slips to the 1628 and 1614 pivots, with resistance now at the 1680 and 1699 pivots. Tomorrow: the monthly Payrolls report will not be released. There is also a speech from FED governor Stein at 9:30, which will probably not be reported either. US Government closed due to lack of cooperation, as certain politicians create talking points for next year’s elections.
The market opened lower again today, but for the first time in 4 trading days it was not bought before 10AM. The decline continued until the SPX made a new low for the move at 1670 around noon. This represents a 60 point decline from last month’s high at SPX 1730. The DOW, over the same period, has dropped 760 points of its 950 point Aug-Sept uptrend. It is still leading to the downside.
After the early decline the market had a good rebound to SPX 1683. If it goes much higher we would consider Intermediate wave A of Major wave A may have ended at today’s low. If so, the market could continue to rebound into the 1690’s. If not, it should head to the next support at SPX 1654-1665.
Short term support at SPX 1654-1665 and the 1628 pivot, with resistance at the 1680 and 1699 pivots. Short term momentum was quite oversold before a bounce back to neutral. The short term OEW charts turned negative with the reversal level now SPX 1688. Best to your trading!
MEDIUM TERM: downtrend likely underway
LONG TERM: bull market