SHORT TERM: gap down opening, DOW -123
Overnight the Asian markets gained 0.3%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:30 Durable goods orders were reported higher: +0.7% v -0.9%. The market gapped down nevertheless to SPX 1983 and continued to 1978 in the first few minutes. The market had closed at SPX 1988 yesterday. After hitting that low the market rallied five points, then made a lower low at SPX 1974 by 11:30. Heading into the afternoon the market rallied to SPX 1980 by 1pm, then went into a 4 point trading range and ended the week at 1978.
For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -0.50%. Bonds gained 8 ticks, Crude slipped 15 cents, Gold rose $14, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Last night the FED reported an increase in the Monetary base: $4.041tn v $3.914tn. Today the WLEI came in unchanged at 54.2%.
The market gapped down at the open for the second time this week. The gap openings continue: 11 of the past 15 trading days. Sense an EW pattern here? The pullback, which started yesterday at the SPX 1991 all time high, very quickly dropped below 1980. SPX 1980 was the high of the first wave up from 1956: 1980-1966-1991. So right now, we have a three wave pattern from that low as the market dropped to SPX 1974 today. These three waves could be indicative of several potential larger patterns. We will discuss this in the weekend update.
Short term support drops to the 1973 and 1956 pivots, with resistance now at SPX 1986 and SPX 2000. Short term momentum was quite oversold this AM during the decline. The short term OEW charts turned negative at the open and the reversal level is now SPX 1981. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market