SHORT TERM: waterfall Thursday, DOW -335
Overnight the Asian markets gained 0.6%. Europe opened higher but lost 0.4%. US index futures were higher, then lower overnight, and at 8:30 weekly Jobless claims were reported unchanged at 287K. The market opened three points below yesterday’s SPX 1969 close and immediately headed lower. By 10am the SPX hit 1956 when Wholesale inventories were reported higher: +0.7% v +0.1%. The market bounced to SPX 1962, but then headed lower again. After that every 5 to 7 point bounce was sold until the SPX hit 1930 at 1:30. Then after a rally to SPX 1942 just past 1:30 the market headed even lower. At 3pm the SPX hit 1928, rallied to 1939 by 3:30, then closed at 1928.
For the day the SPX/DOW were -2.00%, and the NDX/NAZ were -1.90%. Bonds ended flat, Crude dropped $2.10, Gold added $2, and the USD was higher. Medium term support drops to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: Export/Import prices at 8:30, then a Budget surplus at 2pm?
After the best rally of the year yesterday, we were not alone in expecting more upside today. However the market had other intentions, and completely wiped out yesterday’s rally. This volatility is looking more and more like Primary wave IV. Last night, after the post, we shifted the count a bit thinking the current rally could be Int. B. When we got the reverse today, we reverted back to the count we had been tracking: Int. A at SPX 1926 and Int. B at SPX 1978. There is one other option to consider. Should the market hold the OEW 1929 pivot there is a possibility for a rally back into, or slightly above, the 1956 pivot. This would then likely complete Int. wave B in a triangle formation. Should the market lose the 1929 pivot (1922-1936), then Int. wave C should continue lower. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum ended the day oversold. Market remains quite volatile, best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market