SHORT TERM: new highs then pullback, DOW +14
Overnight the Asian markets gained 1.6%. Europe opened lower but gained 0.6%. US index futures were higher overnight and the market opened one point above Friday’s SPX 1798 close. In the opening minutes the SPX made a new high at 1802, then dipped to 1796 by 10am. At 10am the NAHB was reported lower: 54 v 55. The market then bounced to SPX 1801 by 11am, dipped to 1798 by 1pm, then hit 1801 again at 2:30. After that the market started a larger pullback. At 3:30 the SPX hit 1788, then bounced to close at 1792.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.95%. Bonds gained 12 ticks, Crude lost 95 cents, Gold dropped $14, and the USD was lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: a speech from FED chairman Bernanke after the close.
The market opened higher today, hit a new all time high at SPX 1802 and DOW 16k+, then pulled back for the rest of the day. Today’s decline from 1802 to 1788 is the largest pullback in over a week. This suggests Minor 3 may have completed at today’s high with Minor wave 4 currently underway. We noted this possibility with a green Minor 3 label on the hourly chart. Should the market decline a bit further, i.e. 1785, then the count is more probable. If not, there is a possibility that Minor 3 may be subdividing. We should know in the next day or so. Also of note, last Monday the market rallied to SPX 1773 in the opening minutes. Then declined to SPX 1761 by Wednesday. This high and low were labeled as Minor waves 1 and 2. Maybe Minor waves 3 and 4 are following a similar path.
Short term support is at the 1779 pivot and SPX 1746, with resistance at SPX 1805-10 and the 1828 pivot. Short term momentum declined from a negative divergence to slightly oversold at the close. The short term OEW charts remain positive with the reversal level now SPX 1787. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market