SHORT TERM: gap down opening, DOW -167
Overnight the Asian markets gained 0.1%. Europe opened lower and lost 1.0%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported lower: 297k v 319k, the CPI was reported higher: +0.3% +0.2%, and the NY FED was reported higher: 19.0 v 1.3. At 9:15 Industrial production was reported lower: -0.6% v +0.7%. The market gapped down to SPX 1884 at the open and continued to decline. The market had closed at SPX 1889 yesterday. At 10am the Philly FED was reported lower: 15.4 v 16.6, and the NAHB was reported lower: 45 v 47. The market continued to decline until just past 11am when it hit SPX 1864. Then after a bounce to SPX 1869 by 11:30, it declined to 1862 by noon. After that it started to rally. Heading into the close the SPX hit 1872, then dipped to end the day at 1871.
For the day the SPX/DOW were -1.00%, and the NDX/NAZ were down 0.75%. Bonds gained 9 ticks, Crude slid 85 cents, Gold dropped $10, and the USD was lower. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tonight a speech from FED chair Yellen at 6pm. Tomorrow: Housing starts and Building permits at 8:30, Consumer sentiment at 10am, and its Option expiration Friday.
The market gapped down at the open today and traded all the way down to the lower end of the OEW 1869 pivot range. Quite a drop, 40 points, in just two trading days. At SPX 1862 it found support, and then had its first rally since the decline began. Short term momentum nearly hit zero at one point during today’s decline. A very rare occurrence. After yesterday’s drop through the previous rally high at SPX 1889, we posted this uptrend was getting quite choppy and was starting to look corrective.
After a close review, and input from the posters and group members, we updated the SPX count. Since the rally from SPX 1860 looks like three waves, we labeled it a B, and left the first two rallies as Minor 1 and Minute i. Ending the SPX/DOW uptrend at yesterday’s high, just does not fit with the NDX/NAZ count. Unless the entire uptrend is a B wave, and the NDX/NAZ have not completed with their downtrend. The key levels to watch now are SPX 1860 and 1851. A retest of the first would not be surprising, but a drop to the second level would force a count change. Project, monitor and adjust. This market remains somewhat risky short/medium term as there are several count possibilities.
Short term support is at the 1869 pivot and SPX 1860, with resistance at the 1901 and 1929 pivots. Short term momentum was extremely oversold early, then bounced. The short term OEW charts remain negative with the reversal level now at SPX 1877. Best to your Options expiration trading!
MEDIUM TERM: uptrend
LONG TERM: bull market