SHORT TERM: gap down opening, DOW -273
Overnight the Asian markets lost 0.4%. Europe opened lower and lost 1.4%. US index futures were lower overnight, and the market gapped down to SPX 1954 at the open. The SPX had closed at 1965 yesterday. In the opening minutes the SPX hit 1947, then tried to rebound. By 10:30 the SPX hit 1959, then pulled back to 1948 by 11:30. After that the market hit SPX 1957 by 12:30, bounced around a bit and then headed lower. Heading into the close the SPX hit 1935 and closed there.
For the day the SPX/DOW were -1.55%, and the NDX/NAZ were -1.50%. Bonds rallied 21 ticks, Crude dropped $1.55, Gold rose $4, and the USD was lower. Medium term support drops to the 1929 and 1901 pivots, with resistance now at the 1956 and 1973 pivots. Tomorrow: FOMC minutes at 2pm.
The market gapped down to the 1956 pivot at the open today, broke through it in the opening minutes, then rebounded to reenter the range before heading lower. Today was the seventh gap opening since the downtrend began on Sept. 19th. When the SPX broke through the 1956 pivot range we posted an Int. wave b at Monday’s SPX 1978 high. From that high the SPX has declined in an a-b-c: 1958-1969-1947, bounced to 1959, and now appears to be in another a-b-c: 1948-1957-xxxx. When it concludes it should end Minor wave a of Intermediate C. Then we may get another 20+ point rally for Minor b, before heading even lower into Minor wave c. Keep in mind we still need to drop below SPX 1905 to be certain Primary IV is underway. Probabilities still suggest a 75% certainty. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum is extremely oversold. Best to your FOMC trading tomorrow!
MEDIUM TERM: downtrend
LONG TERM: bull market