SHORT TERM: correction makes lower lows, DOW -115
Overnight the Asian markets lost 1.5%. Europe opened lower and lost 1.7%. US index futures were lower overnight, and at 8:30 Export (-0.2% v -0.3%)/Import prices (-0.1% v 0.0%) were reported lower. The market opened three points below yesterday’s SPX 1928 close, dipped to 1922, then rallied to 1937 all in the opening minutes. The market then dropped to SPX 1913 by 10:30. After that it started to rally. By 11am it hit SPX 1925, pulled back to 1917 by 11:30, then hit 1935 by 12:30. Then it headed lower again. By 1:30 the SPX hit 1923, bounced to 1929 by 2pm, then dropped to 1906 and closed there.
For the day the SPX/DOW were -0.90%, and the NDX/NAZ were -2.40%. Bonds gained 9 ticks, Crude lost 45 cents, Gold ended flat, and the USD was higher. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Today the WLEI was reported lower: 51.6% v 52.0%.
Semiconductors gapped down at the open today, pressuring the Techs and they led the general market for the rest of the day. The SPX opened slightly lower, dropped to a new low for the downtrend (1922), rallied, then dropped to 1913. All of this in the first hour of trading. The drop below SPX 1920 cleared out the chance for a potentially big counter rally. But the market did rally to SPX 1936 during the noon hour. After that it headed back towards the lows of the day, and ended even lower. This certainly looks and acts like Primary IV, with Techs now leading to the downside. During the day we added some detail to the SPX hourly chart, and will discuss what we see in the weekend update. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum put in a positive divergence at the initial low, rose near neutral, then headed lower again. Best to your weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market