SHORT TERM: gap up opening, DOW +72
Overnight the Asian markets lost 2.4%. Europe opened lower and lost 0.2%. US index futures were higher overnight, and the market gapped up to SPX 1750 at the open. The SPX had closed at 1742 yesterday. In the first half hour of trading the SPX hit 1752, dipped to 1745, then bounced to 1754 by 10am. At 10am Factory orders were reported lower: -1.5% v +1.8%. Then after a pullback to SPX 1748 by 11am, the market rallied to 1759 by 1pm. After that the market became choppy SPX: 1751 at 2pm, 1757 at 3pm, 1750 at 3:30, then 1757 again just before the 1755 close.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.85%. Bonds lost 8 ticks, Crude rose 90 cents, Gold dipped $3, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 and 1828 pivots. Tomorrow: the ADP index at 8:15, ISM services at 10am, and congressional testimony by FED governor Tarullo, on the Volcker rule, also at 10am.
After hitting SPX 1740 yesterday, getting extremely oversold, and closing at 1742. The market gapped up today in what appears to be a 4th wave of the decline from SPX 1799: 1772-1794-1740-1759 so far. The 4th wave, and 5th wave for that matter, during the SPX 1851 to 1770 decline took a while to unfold as they were both triangles. The market may have just entered another one of those choppy periods. The last one took several days to unfold. Right now were are using SPX 1759 as the potential high of this fourth wave. A fifth wave, to lower lows, will eventually follow.
Short term support is at SPX 1746 and the 1699 pivot, with resistance at SPX 1768 and the 1779 pivot. Short term momentum hit neutral today from extremely oversold. The short term OEW charts remain negative with the reversal level now SPX 1771. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market