SHORT TERM: gap up opening sold, DOW -45
Overnight the Asian markets lost 1.1%. Europe opened lower and lost 0.2%. US index futures were higher overnight, and the market gapped up to SPX 1837 at the open. The SPX had closed at 1831 on Friday. Right after the open, however, the market started to pullback. Around 10am the SPX hit 1831, then tried to rebound. Also at 10am, Factory orders were reported higher: +1.8% v -0.9%, and ISM services were reported lower: 53.0 v 53.9. By 10:30 the SPX had only hit 1834 and started to decline again. At 11:30 the SPX made a new low for the decline at SPX 1824, bounced, then retested 1824 again at 12:30. With a short term positive divergence in place the market started to rally. Around 2:30 the SPX hit 1832, then pulled back to close at 1827.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ -0.40%. Bonds gained 10 ticks, Crude slipped 25 cents, Gold added $1, and the USD was lower. Medium term support drops to the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Over the weekend long term Investor sentiment hit its highest level since 2007: 58.3% v 54.2%. Tomorrow: the Trade deficit at 8:30.
The market gapped up at the open to start the first full week of the year. But again it found sellers awaiting, and the market made a lower low for this pullback at SPX 1824. Thus far, from the SPX 1849 it looks like we have an abc down to today’s low: 1828-1838-1824. The positive hourly divergence suggests Minute a of Minor 2 may have just ended. We posted a green ‘a’ awaiting further market activity. Until the market hits SPX 1833, or higher, we will leave it as a tentative green label.
Short term support remains at the SPX 1814 and SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum displays a positive divergence. The short term OEW charts remain negative with the reversal level now SPX 1833. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market