SHORT TERM: pullback continues, DOW -101
Overnight the Asian markets gained 0.2%. Europe opened lower but ended mixed. US index futures were lower overnight, and at 8:30 the PPI was reported higher: +0.6% v +0.5%. The market opened one point below yesterday’s SPX 1897 close, and continued to pullback. By 10:30 the SPX hit 1891, bounced to 1895 by 11am, and then went into a trading range until the last hour and a half of trading. Then the market broke lower. At 3:30 the SPX hit 1886, then bounced to an 1889 close.
For the day the SPX/DOW were -0.55%, and the NDX/NAZ were -0.60%. Bonds gained 17 ticks, Crude rose 45 cents, Gold rallied $12, and the USD was lower. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: weekly Jobless claims, the CPI and NY FED at 8:30; Industrial production (est. -0.1%) at 9:15; then Philly FED and NAHB at 10am. Also, there is a speech by FED chair Yellen in the evening.
The market opened slightly lower today, pulled back to SPX 1891, then went into a four point trading range until late in the day. With the DOW, mostly IBM, leading the push lower. The SPX hit 1886 in the last hour of trading. This pullback has now overlapped the previous rally high at SPX 1889. The entire uptrend is starting to look quite choppy, just like the previous uptrend. This would suggest the upside potential is now becoming limited for the SPX/DOW. Still expect the uptrend to continue, as long as the NDX/NAZ does not head back to its lows. But it now appears the rallies and pullbacks will be choppier, and possibly the OEW 1929 pivot will put the lid on this uptrend. We are still in a bull market, and the SPX/DOW are in confirmed uptrends.
Short term support drops to the 1869 and 1841 pivots, with resistance at SPX 1889/1891 and the 1901 pivot. Short term momentum dropped to quite oversold from yesterday’s extremely overbought condition. The short term OEW charts turned negative today with the reversal level now SPX 1893. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market