SHORT TERM: another gap down opening, DOW +14
Overnight the Asian markets lost 0.8%. European markets opened lower and lost 0.7%. US index futures were lower overnight, and at 8:30 the Trade deficit showed some improvement: -$41.5bn v -$44.4bn. The market gapped down at the open to SPX 1913, dipped to 1911 in the first few minutes, then started to rally. The SPX had closed at 1920 yesterday. By 10am the SPX hit 1922, dipped to 1917 just past 10am, then rallied to 1928 by noon. A pullback to SPX 1918 followed by 2pm. Then a bounce to SPX 1923 by 3pm, and a dip to 1920 to end the day.
For the day the SPX/DOW were +0.05%, and the NDX/NAZ were mixed. Bonds gained 4 ticks, Crude lost 40 cents, Gold rallied $19, and the USD was lower. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: ECB meeting before the open, weekly Jobless claims at 8:30, then Consumer credit at 3pm.
The market gapped down at the open for the second day in a row today. The low, however, was made just minutes into the open at SPX 1911. Then the market had its best rally since the Minor C wave decline began at SPX 1943. We can now count 5 waves down for Minor C for a completed elongated flat Intermediate wave iv: 1926-1936-1914-1923-1911. This decline could also have been a Minute a of Minor C, today’s rally to SPX 1928 Minute b, and Minute c next to complete a zigzag. Today’s range SPX 1911 to 1928 appears to be the key to downtrend over, or continuing a bit more. Should the SPX rally above 1928 we will place an tentative Int. iv label at the 1911 low. Should the SPX drop below 1911 we will place a Minute b label at the 1928 high. With positive divergences just above everywhere we think traders will send the market higher.
Short term support is at SPX 1911 and the 1901 pivot, with resistance at the 1929 pivot and SPX 1943. Short term momentum remained around neutral all day. The short term OEW charts flip-flopped near the highs but ended the day negative with the reversal level now at SPX 1924. Best to your trading!
MEDIUM TERM: downtrend trying to bottom
LONG TERM: bull market