SHORT TERM: gap up – lower lows – then up again, DOW +87
Overnight the Asian markets lost 0.5%. Europe opened higher and gained 0.4%. US index futures were higher overnight, and the market gapped up to SPX 1872 at the open. The SPX had closed at 1863 on Friday. After the open the market pulled back to SPX 1865, then rallied to 1877 by 10:30. At 10am Pending home sales were reported higher: +3.4% v -0.8%. Then the NDX/NAZ went back into selloff mode and the market started to pullback. At 1:30 the SPX had made a lower pullback low at 1851, displayed another positive divergence, and started to rally. By 3:30 the SPX had rallied back to 1873, then dipped to close at 1869.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were mixed. Bonds lost 5 ticks, Crude added 40 cents, Gold dipped $6, and the USD was lower. Medium term support rises to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: Case-Shiller at 9am, Consumer confidence at 10am, and the FED starts their FOMC meeting.
The market gapped up at the open today, but the NDX/NAZ growth indices then resumed their pullback that started on Thursday. By early afternoon the SPX had made a lower low for the pullback, from 1885, at 1851, for about a 50% retracement. The pattern is now clearly a complex double three: 1874-1884-1870-1883-1860-1877-1851. With the second three (1860-1877-1851) about double the first. With the SPX clearing the 1869 pivot again, probabilities suggest that Minor wave 2 may have completed.
Short term support rises at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum rose after Friday’s positive divergence, only to set up another positive divergence at today’s lower low. The short term OEW charts flip-flopped again today ending the day positive, with the reversal level at SPX 1868. Best to your trading this potentially wild week.
MEDIUM TERM: uptrend probable
LONG TERM: bull market