SHORT TERM: pullback resumes, DOW -179
Overnight the Asian markets gained 1.0%. Europe opened higher and gained 0.3%. US index futures were lower overnight, and the market opened three points under Friday’s SPX 1842 close. Then it started to drift higher, and reached SPX 1843 by 10:30. After that the market started to pullback. The decline was quite steady, with only two-three point bounces along the way, as the market dropped to SPX 1816 around 3:30. At 2pm the Treasury dept. had reported a Budget surplus: +$53.2bn v -$1.2bn. Heading into the close the market bounced to SPX 1819 and closed there.
For the day he SPX/DOW were -1.15%, and the NDX/NAZ were -1.45%. Bonds gained 9 ticks, Crude lost $1.10, Gold rose $8, and the USD was lower. Medium term support drops to the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: Retail sales and Export/Import prices at 8:30, then Business inventories at 10am.
The market started the week lower, rallied back to the recent SPX 1843 high again, then headed south. When the SPX dropped below 1832 it looked like Minute wave b had completed with that double three, and Minute wave c was underway. The decline was quite swift as the SPX broke below the Minute a low at 1824, and continued to 1816. Our two general targets for a Minute wave c/Minor 2 low remain around SPX 1814 or 1800. We are right about there!
Short term support is now at SPX 1814 and SPX 1800, with resistance at the 1828 and 1841 pivots. Short term momentum ended extremely oversold as we had been expecting. The short term OEW charts are now negative with the reversal level SPX 1835. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market