SHORT TERM: gap down to start 2014, DOW -135
Overnight the Asian markets open, were -0.4%. Europe opened higher but closed -1.2%. US index futures gapped down as trading started, and remained lower into the open. At 8:30 weekly Jobless claims were reported higher: 339k v 338k. The market gapped down at the open to SPX 1842 and continued lower. The SPX had closed at 1848 on Tuesday. By 10am the SPX hit 1835, while Construction spending was reported higher: +1.0% v +0.8% and the ISM was reported lower: 57.0 v 57.3. The market rallied to SPX 1839 by 10:30, but then headed even lower. At 2:30 the SPX hit the 1828 pivot and tried to rally again. Around 3:30 the SPX hit 1834, then backed off to close at 1832.
For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -0.80%. Bonds gained 6 ticks, Crude dropped $2.85, Gold rallied $19, and the USD was higher. Medium term support drops to the 1828 and 1779 pivots, with resistance now at the 1841 and 1869 pivots. Tomorrow: monthly Auto sales and two FED speeches. FED governor Stein at 1:15, then chairman Bernanke at 2:30.
The market gapped down at the open today to start 2014. Generally not a good sign for the year. By 10am the SPX hit 1835, and the pullback looked quite normal for a Minute iv. But the rally was short-lived and the market headed lower. Apparently, either during the Friday-Monday 1845-1839 pullback, or Tuesday’s 1849-1842 pullback, Minute iv occurred. For most of us it was too small to get noticed. Nevertheless, when the market dropped below SPX 1835, before noon today, we posted a Minor 1 label at the SPX 1849 high.
Typically second waves have had steep pullbacks in this bull market. This suggests a possible re-test of the previous SPX 1814 high, or SPX 1800, for support. Thus far the market has already dropped 21 points to the 1828 pivot. Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 and 1869 pivots. Short term momentum was quite oversold at the low. The short term OEW charts turned negative early this AM, with the reversal level now SPX 1836. Best to your trading in the New Year!
MEDIUM TERM: uptrend
LONG TERM: bull market