SHORT TERM: gap down opening, DOW -2
Overnight the Asian markets lost 0.5%. Europe opened higher but finished mixed. US index futures were lower overnight, and at 8:30 Housing starts were reported lower: 1009k v 1017k, and Building permits higher: 1080k v 1018k. The market gapped down at the open to SPX 2047. The market had closed at SPX 2052 yesterday. The decline continued until 11am when the SPX hit 2040. Then the market rallied back to SPX 2052, yesterday’s close, just after the FOMC minutes were released at 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20141119a.htm. Another pullback followed to SPX 2044 just before 3pm. Then the market rallied to close at SPX 2049.
For the day the SPX/DOW were -0.10%, and the NDX/NAZ were -0.50%. Bonds lost 9 ticks, Crude slipped 2 cents, Gold dropped $14, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims and the CPI at 8:30, then Existing home sales, the Philly FED, and Leading indicators at 10am.
The market gapped down at the open today, hit SPX 2040, rallied back to 2052 to close the gap, then pulled back again after the FOMC minutes. For the first time, we can now count a potential five waves up from the SPX 1821 downtrend low: 1898-1878-2046-2030-2056. The pullback from SPX 2056 to 2040 may suggest a subdividing 5th wave, or the first wave down. Should the market break SPX 2030 we would favor the latter. However, keep in mind, this uptrend can still unfold in a large a-b-c. So any top call, during this particular uptrend, is a difficult task. The DOW/NDX/NAZ continue to display small daily negative divergences. Short term support is at the 2019 pivot and SPX 2000, with resistance at SPX 2049 and the 2070 pivot. Short term momentum hit oversold from yesterday’s extremely overbought, then ended the day at neutral. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market