SHORT TERM: budget battles begin, DOW -130
Overnight the Asian markets lost 0.9%. Europe opened lower, rallied, and then lost 0.3%. US index futures were lower overnight, but the market opened unchanged at SPX 1803. Right after the open, however, the market started to decline. By 12:30 the SPX hit 1787, was extremely oversold, and tried to rally. A hour later the SPX hit 1792, and began to pullback again. At 2pm the Budget deficit was reported lower: -$135.2bn v -$172.1bn. Heading into the close the SPX hit 1780, then bounced to end the day at 1782.
For the day the SPX/DOW lost 0.95%, and the NDX/NAZ lost 1.35%. Bonds dropped 12 ticks, Crude slid $1.30, Gold declined $10, and the USD was lower. Odd to see everything lower. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: weekly Jobless claims at 8:30, along with Retail sales and Export/Import prices. Then at 10am Business inventories. Plus at some point a House vote on the proposed two year budget.
The market opened flat and then headed south. Today’s decline eliminated the potential 1-2-3-4 from the 1779 pivot, when the market dropped under 1796. Now it certainly looks like we had an ‘abc’ rally to SPX 1812, after the ‘abc’ decline to the 1779 pivot. The count posted on the SPX hourly chart stands. Since this market has bounced off the OEW 1779 pivot four times over the past month and a half. And is now back there for the fifth time. We should know shortly if the SPX 1814 all time high was the uptrend high. Or just another pause in this ongoing uptrend. Also, it is possible to count all of the activity from the SPX 1814 high as a failed flat: 1779-1812-1780. The next couple of days look to be important short and medium term.
Short term support is at the 1779 pivot and SPX 1746, with resistance at SPX 1810 and SPX 1818. Short term momentum hit extremely oversold, and displays a slight positive divergence. The short term OEW charts turned negative right after the open with the reversal level now SPX 1798. Best to your trading on House (US Gov’t Budget) voting day!
MEDIUM TERM: uptrend
LONG TERM: bull market