SHORT TERM: market remembers the pullback, DOW -90
Overnight the Asian markets gained 0.1%. Europe opened lower, but gained 0.1% as well. US index futures were lower overnight. At 8:30 Housing starts were reported lower: 888k v 999k, as were Building permits: 937k v 986k, but the PPI was reported higher: +0.2% v +0.4%. The market opened four points below yesterday’s SPX 1841 close, dipped one point lower, then began to rally. Around 10:30 the SPX made a new rally high at 1847, and then began to pullback. At 12:30 the SPX hit 1834, for the first notable pullback since last Thursday. After a rally to SPX 1842 by 2pm the FOMC minutes were released: http://www.federalreserve.gov/newsevents/press/monetary/20140219a.htm. The market then started to pullback again. Heading into the close the SPX hit 1827, then bounced to close at 1829.
For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.75%. Bonds lost 7 ticks, Crude rallied 85 cents, Gold dropped $11, 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 and the CPI at 8:30, then the Philly FED and Leading indicators at 10am.
The market opened lower, rallied to a new high, and then pulled back for the rest of the day. The upper range of the OEW pivot did provide resistance, plus weak housing reports and the FOMC minutes provided the rest. We can now count five completed waves up from the SPX 1738 low, and the sixth wave underway: 1788-1777-1827-1809-1848- then 1827 so far. This pullback is the biggest pullback since the rally began. Ideally, if an impulse wave, the SPX should find support around 1809 – the previous 4th wave. If not an impulse wave, and part of a B wave, it may not even overlap 1827 at all. It touched it today.
Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1851. Short term momentum ended quite oversold after that negative divergence. The short term OEW charts just turned negative with the reversal level now SPX 1830. Best to your trading!
MEDIUM TERM: uptrend probable
LONG TERM: bull market