SHORT TERM: downtrend confirmed, DOW -238
Overnight the Asian markets lost 0.4%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:15 the ADP index was reported higher: 213k v 204k. The market opened three points below yesterday’s SPX 1972 close, and continued lower. At 10am Construction spending was reported lower: -0.8% v +1.8%, as was ISM manufacturing: 56.6 v 59.0. Just past 10am the SPX hit 1954 and started to rally. The rally lasted until 11am when the SPX hit 1964, and then the market turned lower again. Just past 3pm the SPX hit 1942, rallied to 1951 just before the close, then ended this down day at 1946.
For the day the SPX/DOW were -1.35%, and the NDX/NAZ were -1.60%. Bonds gained 30 ticks, Crude slipped 45 cents, Gold gained $6, and the USD was lower. Medium term support now drops to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: the ECB meets, weekly Jobless claims at 8:30, then Factory orders at 10am.
The market opened slightly lower today, then dropped quickly to the OEW 1956 pivot. After a rally to SPX 1964 the market then dropped below the 1956 pivot range (1949-1963). When dropping below the 1956 pivot the SPX also broke the rising support trend line since 2012, and most of Primary III. These factors, plus the downtrend confirmation, raises the probabilities of Primary IV to 75%-25%. The final confirmation would be a drop below SPX 1905. With Primary IV probably underway the following three support levels should be kept in mind in the months ahead: 1738, 1627 and 1560, with SPX 1627 the most likely. Yes, it can go that low. Short term support drops to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum hit extremely oversold early, then ended quite oversold. Best to your trading !
MEDIUM TERM: downtrend
LONG TERM: bull market