SHORT TERM: gap down open – then a rally, DOW +18
Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.1%. US index futures were sharply lower overnight, and the market gapped down to SPX 1871 at the open. The market had closed at SPX 1881 on Friday. In the opening minutes the SPX dropped down to 1867, and then began to rally. At 10am ISM services was reported higher: 55.2 v 53.1. Just after 10:30 the SPX closed the opening gap, and then hit 1884 by 11:30. After a small pullback to SPX 1879 by 1:30 the market began to more higher. Just before 3pm the SPX hit 1886, then pulled back to close at 1885.
For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.40%. Bonds lost 2 ticks, Crude slipped 40 cents, Gold rallied $12, and the USD was flat. Medium term support remains at the 1869 ad 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: the Trade deficit at 8:30, and a speech from FED governor Stein at 7pm.
The market gapped down on the open today, immediately hit the OEW 1869 pivot range, and then rebounded for the rest of the day. The recent small five rally from SPX 1851 rose 40 points to 1891, and now has pulled back 24 points or 0.6%. This pullback fits quite well with what was expected. Should the wave pattern continue to unfold as expected, the market should now be in Minute iii of Minor 3. Once SPX 1891 is cleared we’ll post the Minute ii label at today’s low.
Short term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum hit quite oversold today after Friday’s negative divergence. The short term OEW charts flipped from negative early, to positive with the reversal level now SPX 1880. Best to your trading!
MEDIUM TERM: uptrend probable
LONG TERM: bull market