SHORT TERM: gap down Tuesday, DOW -130
Overnight the Asian markets open gained 0.3%. Europe opened higher but lost 0.6%. US index futures were lower overnight, and at 8:30 the Trade deficit was reported lower: -$40.4bn v -$42.3bn. The market gapped down at the open for the second day in a row. It opened at SPX 1879, dipped to 1876 by 10am, and then tried to rally. The market had closed at SPX 1885 yesterday. After a bounce to SPX 1881 by 10:30 the market headed even lower. At 3pm the SPX hit 1868, bounced to 1872 by 3:30, then closed at 1868.
For the day the SPX/DOW were -0.85%, and the NDX/NAZ were -1.35%. Bonds gained 2 ticks, Crude added 15 cents, Gold slipped $3, and the USD was lower. Medium term support slips to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: FED chair Yellen testifies before Congress at 10am, then Consumer credit at 3pm.
The market gapped down at the open, just like yesterday. But unlike yesterday, when the market dropped 14 points in the first few minutes and then rallied for the rest of the day. Today, the market dropped 9 points in the first half-hour, bounced, and then declined for the rest the day. Yesterday’s low was SPX 1867, today’s low 1868. In between a rally to SPX 1886. So far it looks like a Minute wave ii flat. The entire pullback from SPX 1891 can still stretch into a zigzag if it goes much lower. No change in the count unless the OEW 1869 pivot range is broken. Two days of FED chair Yellen testimony next.
Short term support drops to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum ended quite oversold. The short term OEW charts continue to flip-flop ending the day negative with the reversal level now SPX 1878.
MEDIUM TERM: uptrend probable
LONG TERM: bull market