SHORT TERM: choppy day, DOW -5
Last night the FED released this report on the banks: http://www.federalreserve.gov/newsevents/press/bcreg/20140326a.htm. Overnight the Asian markets gained 0.4%. European markets opened lower and lost 0.1%. US index futures were higher overnight. At 8:30 Q4 GDP was reported as expected: +2.6%, and weekly Jobless claims were lower: 311k v 320k. The market opened four points under yesterday’s SPX 1853 close, bounced to 1852, and then dropped to 1842 all within the first half hour. Then the market started to rally. At 10am Pending home sales were reported lower: -0.8% v +0.1%. The rally hit a high of SPX 1856 by 10:30, then the market pulled back again. At noon the SPX hit 1843, a higher low, rallied to 1852, and then pulled back again. At 2pm the SPX hit 1845, bounced to 1850 by 3pm, retested 1845 by 3:30, then hit 1851 before closing at 1849. Wild swings today.
For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.55%. Bonds gained 2 ticks, Crude rallied $1.05, Gold dropped $8, and the USD was higher. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Personal income/spending and PCE prices at 8:30, then Consumer sentiment at 10am. FED governor Tarullo gives a speech tonight in NY.
The market altered its recent characteristics today. Instead of rallying at the open, like it has for the past four trading days. It opened lower and went lower before rallying, and then entered a trading range. The opening decline took the SPX back to the OEW 1841 pivot range for the first time in two weeks. The market has vacillated above and below this pivot for all of 2014 so far.
The growth indices, NDX/NAZ, led the market lower again as they hit their lowest levels since February 10th. The NAZ has dropped 5.4% since early March, and most of the growth leaders are already in confirmed downtrends. The SPX/DOW are barely down 2.5% during the same period. If the NDX/NAZ can complete its correction by next week. Then the SPX/DOW are not likely to enter a downtrend, then they can all rise together. If it takes longer, then the SPX/DOW are likely to retest the early February lows.
Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum was quite oversold at today’s low, and ended the day above oversold. The short term OEW charts remain negative with the reversal level now SPX 1859. Best to your trading!
MEDIUM TERM: uptrend weakening
LONG TERM: bull market