SHORT TERM: gap down opening, DOW -106
Overnight the Asian markets lost 0.3%. Europe opened lower and lost 0.9%. US index futures were lower overnight and the market gapped down to SPX 2069 at the open. The SPX had closed at 2075 on Friday. After the open the market rallied to SPX 2076, closing the gap, and then headed lower again. Just past 2pm the SPX hit 2054. A rally to SPX 2063 followed by 3pm, then a dip into the close ended the day at 2060.
For the day the SPX/DOW lost 0.65%, and the NDX/NAZ lost 0.80%. Bonds gained 9 ticks, Crude lost $2.85, Gold rallied $13, and the USD was lower. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Wholesale inventories at 10am, and a FED open board meeting at 3pm.
The market gapped down at the open today, rallied to fill the gap, and then headed down to SPX 2054 before rallying into the close. The 5 minute chart for Minor 5, posted over the weekend, has now had a full retracement of the 5th Minute wave from SPX 2066. Also the rising lower trend line of the Minor 5 diagonal triangle, we have been tracking, was broken to the downside today as well. These patterns suggest the entire uptrend, from SPX 1821, may have completed on Friday at SPX 2079. Right in the Fibonacci resistance zone of SPX 2078-2084.
Typically after an uptrend ends, there is first a selloff, followed by a failed rally, and then the downtrend takes control. Today we could have had that selloff. If the market rallies into the upper 2060’s tomorrow and then breaks today’s low, a downtrend would likely be underway. Short term support is at the important SPX 2050 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum declined to extremely oversold after Friday’s negative divergence. Best to your trading!
MEDIUM TERM: uptrend may have topped
LONG TERM: bull market