SHORT TERM: gap down opening and volatile day, DOW -161
Overnight the Asian markets finished mixed. Europe opened lower and lost 1.0%. US index futures were lower overnight. At 8:30 weekly Jobless claims were reported lower: 302k v 304k, Housing starts were lower: 893k v 1001k, and Building permits were lower: 963k v 991k. The market gapped down at the open to SPX 1976, dipped to 1975, and then started to rally. The SPX had closed at 1982 yesterday. At 10am the Philly FED was reported higher: 23.9 v 17.8. The market then closed the opening gap by 10:30 at SPX 1982, and began to pullback. At 11:30 the SPX hit 1968, had a quick bounced to 1973, and then hit 1966 by noon. A rally followed to SPX 1976 just before 1pm, then the market headed lower. Just past 3:30 the SPX hit 1956, then bounced to close at 1958.
For the day the SPX/DOW were -1.05%, and the NDX/NAZ were -1.40%. Bonds gained 21 ticks, Crude rose $1.90, Gold rallied $21, and the USD was lower. Medium term support drops to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: Consumer sentiment and Leading indicators at 10am, and it is Options expiration.
The market gapped down at open, again following Europe, but closed the gap by 10:30. After that the market got even more volatile, with a drop to SPX 1966, a rally to 1976, then another drop to 1956. Today, International events created some uncertainty. And, markets dislike uncertainty. This was evident with the rallies in Bonds, Crude and Gold. We continue to hold our primary count, since the SPX 1986 high, as an ongoing, choppy, Intermediate wave iv downtrend. Recent new highs in the DOW/NDX offered an alternative count of Minor 5 underway. This afternoon’s decline certainly lowered the probabilities of the alternate count, with the drop below SPX 1960. We continue to count from the Intermediate wave iii high: Minor A (1959-1973-1953), Minor B (1970-1960-1983-1965-1984), and Minor C underway (1966-1976-1956 so far). As soon as this market loses the OEW 1956 pivot range (1949-1963) there could be a sharp drop to the Intermediate wave iv low.
Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1986. Short term momentum declined after yesterday’s negative divergence, and hit extremely oversold at the lows. The short term OEW charts ended negative with the reversal level SPX 1973. Best to your Friday trading!
MEDIUM TERM: downtrend looks underway
LONG TERM: bull market