SHORT TERM: new highs then decline, DOW -119
Overnight the Asian markets gained 0.6%. European markets opened higher but finished mixed. US index futures were lower overnight, and at 9am Case-Shiller was reported lower: +10.8% v +12.4%, and the FHFA index was reported flat: 0.0% v +0.7%. The market opened four points under yesterday’s SPX 1963 close, and then began to rally. At 10am New home sales were reported higher: 504k v 433k, and Consumer confidence was reported higher: 85.2 v 83.0. The rally continued until 11am when the SPX entered the 1973 pivot range at SPX 1968. Then it started to pullback. The market then declined, with only two point bounces, to SPX 1948 by 3:30. Then the market bounced to SPX 1952 and closed at 1950.
For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.30%. Bonds gained 12 ticks, Crude slipped 15 cents, Gold added $1, and the USD was higher. Medium term support drops to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: Q1 GDP (est. -1.8%) and Durable goods orders at 8:30.
The market nearly gapped down this morning, but retested yesterday’s SPX 1959 low and rallied. It then cleared the all time high at SPX 1964 around 10:30, and entered the 1973 pivot range when hitting 1968 around 11am. Then it started to pullback. The pullback was clearly the largest since Minute wave iv (1956-1926), as the market dropped 20 points. So it does appear our count for Minute wave v was correct: 1941-1931-1960-1952-1968. At today’s high Minor 3 appears to have topped, and the market is now declining in Minor wave 4. Adding to this probability is the fact that the DOW failed to make a new high today. Minor wave 4 is expected to find support at the 1929 pivot range (1922-1936). Since the important pullbacks have ranged between 30 and 40 points during this uptrend. The 1929 pivot range fits nicely. Also there are two previous fourth waves at SPX 1925/1926: Minute iv of Minor 3, and Micro 4 of Minute iii.
Short term support is at the 1929 pivot and SPX 1916/1919, with resistance at the 1956 and 1973 pivots. Short term momentum created a negative divergence at today’s high, then hit quite oversold. The short term OEW charts turned negative with the reversal level now SPX 1960. Best to your Q1 GDP trading tomorrow!
MEDIUM TERM: uptrend
LONG TERM: bull market