SHORT TERM: gap down opening then recovery, DOW -48
Overnight the Asian markets ended mixed. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market gapped down to SPX 1972 at the open. The SPX had closed at 1978 on Friday. The market continued to decline until 11am when the SPX hit 1966. Then with the market slightly oversold it start to rally. Around 3:30 the SPX hit 1976, then dipped to 1974 to end the day.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.15%. Bonds ended flat, Crude rallied 85 cents, Gold rose $2, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, FHFA housing at 9am, then Existing home sales at 10am.
The market gapped down at the open today and traded down to the lower end of the 1973 pivot range (1966). Then it rallied back over the pivot again in the afternoon. At the open we labeled Friday’s SPX 1980 high as Minute wave b of Minor C. When the market rallied 10 points off the low we were a bit surprised. No matter how much bad news has been thrown at this market, it has just sold off and then recovered again. From a wave viewpoint, it almost appears like it still needs to complete a pattern. We have been carrying a Minor 4 alternate count on the NAZ charts. Today we can see, for the first time, that possibility on the SPX charts as well at Thursday’s 1956 low. When this market breaks out of its trading range: SPX 1953-1986, we will get the uptrend/downtrend answer.
Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum hit slightly oversold this morning then rebounded past neutral. The short term OEW charts continue to flip-flop, ending the day positive, with the reversal level SPX 1973. Best to your trading!
MEDIUM TERM: downtrend/uptrend inflection point
LONG TERM: bull market