SHORT TERM: gap down then rebound, DOW -71
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 1.0%. US index futures were much lower overnight, and at 8:30 weekly Jobless claims were reported lower: 304k v 315k. The market gapped down to SPX 1957 at the open, hit 1953 just before 10am, then started to rally. The SPX had closed at 1973 yesterday. At 10am Wholesale inventories was reported higher: +0.5% v +1.1%. The rally continued into the afternoon when the SPX reached 1970 by 1:30. Then after a pullback to SPX 1962 by 3pm, the market bounced to 1967 by 3:30, then closed at 1965.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.40%. Bonds gained 4 ticks, Crude rose 55 cents, Gold was $7 higher, and the USD moved up as well. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: the Treasury budget at 2pm.
The market gapped down at the open today for the third time this week. It immediately took out Tuesday’s SPX 1959 low, adding probability to the Intermediate wave iv downtrend. Then after setting up a positive short term divergence around 10am, the market started to rally. We posted a tentative Minor a label at to today’s SPX 1953 low. The rally to SPX 1970 looks like it is either part, or all, of Minor wave b. This market has been trading mostly between the 1956 and 1973 pivots this week. If this count is correct Minor c should be underway soon. Likely downside target for Int. iv is between the 1901 and 1929 pivots.
Short term support remains at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1986. Short term momentum bounced to neutral after today’s positive divergence. The short term OEW charts continue to flip-flop, which is often signs of a correction, and the reversal level is now SPX 1966. Best to your trading!
MEDIUM TERM: uptrend likely topped
LONG TERM: bull market