SHORT TERM: reversal Wednesday, DOW +154
Overnight the Asian markets were mixed. Europe opened lower but gained 0.8%. US index futures were higher overnight, and the market opened one point above yesterday’s SPX 1983 close. After an uptick to SPX 1986 the market started to pullback again. At 10am New home sales hit their highest level in 6 years: 504k v 412k. The pullback continued until about 10:30 when the SPX hit exactly 1979. Then the market started to rally. The rally continued for the rest of the day, with only one three point reversal, as the market hit SPX 2000 by 3:30. Then a dip into the close ended the day at SPX 1998.
For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +1.05%. Bonds lost 8 ticks, Crude rose $1.45, Gold slipped $6, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims and Durable goods at 8:30.
The market opened higher today, then pulled back to exactly last Tuesday’s SPX 1979 low. The irregular flat we had been tracking: 1979-2019-1979, appeared in place and we marked a tentative Minor wave 2 label at that low. The market then had its first reversal rally since the 40 point decline began. This irregular flat looks like the one in the SPX in mid-May. Then when the market crossed the hourly EMA’s we updated the tentative label to a dark blue Minor wave 2. After a hard down Minute wave C, the market now has a chance to kickoff Minor wave 3. The key level to watch now is SPX 1979 and the OEW 1973 pivot range. If the market heads back to that level and breaks that pivot, probabilities increase that Primary IV is underway. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Short term momentum hit quite overbought today. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market