SHORT TERM: pullback continues, DOW -94
Overnight the Asian markets were mixed. Europe opened lower and lost 1.7%. US index futures were lower overnight as well. The market gapped down at the open to SPX 1795, traded in a narrow range for a few minutes, then bounced to 1800 by 10:30. After that it started to pullback again. Around 2:30 the SPX hit 1788, was extremely oversold, and started to rally. Heading into the close the SPX hit 1795 and ended the day there.
For the day the SPX/DOW were -0.45%, and the NDX/NAZ were -0.15%. Bonds gained 6 ticks, Crude rallied $2.30, Gold added $4, and the USD was lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Last night the FED reported a slight increase in the Monetary base: $3.689tn v $3.682tn. Tomorrow: ADP at 8:15, the Trade deficit at 8:30, New home sales and ISM services at 10am, then the FED’s beige book at 2pm.
The market gapped down at the open today for the first time since November 13th. That gap down was immediately bought. This one was not. The recent decline appears to have two facets: weaker post-Thanksgiving US sales and a potential recession in France (-2.65% today). With the latter probably more important medium term. Should Europe head into another downturn, France is its second largest economy, it would echo throughout the world. Definitely something to keep an eye on in the upcoming weeks. The ECB meets on Thursday.
Short term support remains at the 1779 pivot and SPX 1746, with resistance at SPX 1810, SPX 1818 and the 1828 pivot. Short term momentum hit extremely oversold this afternoon then bounced towards neutral. The short term OEW charts remain negative with the reversal level now SPX 1801. Best to your holiday trading!
MEDIUM TERM: uptrend weakening
LONG TERM: bull market