SHORT TERM: wacky Wednesday, DOW -32
Overnight the Asian markets gained 0.3%. Europe opened lower and lost 0.8%. US index futures were higher overnight. At 8:15 the ADP was reported lower: 218k v 281k, then at 8:30 Q2 GDP was reported higher: +4.0% v -2.9%. The market gapped up at the open to SPX 1978, hit 1979, and then started to pullback. At 11am the SPX hit 1964, bounced to 1969 by 11:30, then hit 1962 just past 12pm. The market then gradually drifted higher ahead of the FOMC statement at 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20140730a.htm. After the statement the market first ticked down, then rallied to SPX 1976 by 2:30. Then the market went into pullback mode again. At 3pm the SPX hit 1967, then bounced to end the day at 1970 – where it closed yesterday.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.45%. Bonds lost 24 ticks, Crude dropped $1.35, Gold slipped $4, and the USD was higher. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45.
The market gapped up at the open, hit SPX 1979, and then pulled back. During the pullback it broke through the OEW 1973 pivot range, hitting SPX 1962. This to us, suggests the Minor wave 5 diagonal ended at SPX 1985. And, all the activity since then is the beginning of an Intermediate wave iv downtrend. From that high the market has been quite choppy SPX: 1970-1979-1962-1976-1967—. Difficult to count at this point, but this morning’s positive divergence suggests an ‘a’ wave ended at SPX 1962, and a ‘b’ wave is underway.
Short term support remains at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1991. Short term momentum continues to rise off that positive divergence. The short term OEW charts ended negative with the reversal level now SPX 1972. Best to your trading!
MEDIUM TERM: uptrend may have topped
LONG TERM: bull market