SHORT TERM: DOW weak – SPX stable, DOW -68
Overnight the Asian markets gained 1.1%. Europe opened lower and lost 0.2%. US index futures were lower overnight, and at 8:15 the ADP index was reported higher: 238k v 215k. The market opened three points below yesterday’s SPX 1838 close and continued lower. After about 15 minutes of trading the SPX hit 1831, and then started to rally. At 10:30 the SPX was back to yesterday’s 1840 high. But then again started to pullback. At 1:30 the SPX hit 1835, bounced to 1839 around the time the FOMC minutes were released: http://www.federalreserve.gov/newsevents/press/monetary/20140108b.htm, then started to pullback again. At 3pm Consumer credit was reported lower: $12.3bn v $18.2bn. Around 3:30 the SPX hit 1832, then bounced to close at 1837.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were +0.30%. Bonds lost 20 ticks, Crude dropped $1.10, Gold slid $7, and the USD was higher. Medium term support remains at the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: weekly Jobless claims at 8:30.
The market opened lower today , dropped down to SPX 1831, then rallied back to 1840. At the high we noticed a short term negative divergence building, and noted it on the hourly chart. After that the market seemed to drift sideways awaiting the FOMC minutes. After they were released the market headed lower, then bounced into the close. We can count a three wave advance from Monday’s SPX 1824 low to today’s high: 1840-1831-1840. This could be all, or a large part, of Minute wave b. As a result we posted a tentative Minute b label on the hourly chart. If Minute b is done, the next objective, to continue the Minor wave 2 pullback, is for the market to drop below SPX 1824.
Short term support remains at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1849. Short term momentum is displaying a negative divergence. The short term OEW charts have ended positive with the reversal level now SPX 1835. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market