SHORT TERM: gap down opening then rebound, DOW -25
Overnight the Asian markets lost 1.5%. Europe opened higher and gained 0.2%. US index futures were sharply lower overnight. At 8:30 weekly Jobless claims were lower: 264k v 287k, and at 9:15 Industrial production was reported higher: +1.0% v -0.1%. The market gapped down at the open to SPX 1841, then dipped to 1838 before rallying. At 10am the Philly FED was reported lower: 20.7 v 22.5, the NAHB was lower: 54 v 59, and the SPX hit 1853. Then after a quick pullback to SPX 1835, the low for the day, the market then rallied to 1858 by 10:30. After that we had several swings over the next hour: 1844-1862-1852-1868 by 11:30. Then the market pulled back to SPX 1852 by noon, before rallying to 1876 by 1:30. Wild swinging market again today. The market then pulled back to SPX 1857 by 3pm, rallied to 1868 just before the close, then ended the day about where it ended yesterday 1863.
For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds lost 19 ticks, Crude rose 90 cents, Gold added $2, and the USD was higher. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Housing starts, Building permits, and a speech from FED chair Yellen at 8:30. Then Consumer sentiment by 10am on Options expiration Friday.
The market gapped down again at the open, third gap opening this week, hit SPX 1838, rallied to 1853, then hit 1835. Holding yesterday’s low of SPX 1821. Then the market rallied in a series of overlapping waves to SPX 1868, pulled back to 1852, then rose above yesterday’s 1869 high when hitting 1876. A higher high and low after yesterday’s nasty selloff. The price action since yesterday’s SPX 1821 low has been quite different than what we have observed during the entire 2019 to 1821 decline. A change like this sometimes equates to a change in trend. As a result we are labeling yesterday’s low with a tentative green Major wave A. And, will start tracking the current rally as if it was/is Major wave B. As long as the SPX 1821 low holds we could rally into early November. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum continued to rise above neutral after yesterday’s extreme oversold reading. Best to your trading OPEX!
MEDIUM TERM: Major A downtrend may have bottomed
LONG TERM: bull market but in P4