REVIEW: market pulls back, DOW unchanged
Overnight the Asian markets gained 0.3%. European markets opened higher and gained 0.2%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 326k v 311k, and the Trade deficit larger: -$42.3bn v -$39.1bn. The market opened three points above yesterday’s SPX 1891 close, traded in a narrow range for the first half hour, and then began to pullback. At 10am ISM services were reported higher: 53.1 v 51.6. The pullback continued into the afternoon when around 1pm the SPX hit 1884. Then after a bounce to SPX 1889 by 1:30 the market headed lower. At 2:30 the SPX touched 1883 and then began to rally. Heading into the close the SPX reached 1890, then dipped to end the day at 1889.
For the day the SPX/DOW were -0.05%, and the NDX/NAZ were -0.85%. Bonds gained 1 tick, Crude added 75 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: monthly Payrolls at 8:30: est. +185k to 195k.
The market opened at an all time high, then must have sensed that Fibonacci relationship and negative divergence and began to pullback. The pullback looked quite normal and reset short term momentum from quite overbought to under neutral. From the recent SPX 1843 low we can now count four waves up: 1867-1853-1894-1883. The NDX/NAZ appeared to be under selling pressure from the opening this morning. GOOG, which started trading split shares today, helped early being up 3%. But during the day even the GOOG turned negative for a while. At today’s high the market hit the lower end of the 1901 pivot range (1894-1908). A rally to the upper end or higher should follow when this pullback is done.
Short term support remains at the 1869 and 1841 pivots, with resistance at the 1901 pivot and SPX 1933. Short term momentum ended the day just above neutral. The short term OEW charts remain positive with the reversal level now at SPX 1880. Best to your trading Payrolls day!
MEDIUM TERM: uptrend
LONG TERM: bull market