SHORT TERM: fifth gap opening this week, DOW -316
Overnight the Asian markets lost 0.2%. Europe opened lower and plunged 2.7%. US index futures were lower overnight as well. At 8:30 the PPI was reported lower: -0.2% v +0.2%. The market gapped down at the open for the fourth day this week. After it opened at SPX 2023 it rallied to 2032 by 10am. At 10am Consumer sentiment was reported at its highest level since 2007. Nevertheless, the market started to decline again. By noon the SPX hit 2012, with some 5-6 point swings along the way. Then it started to rally. The rally lasted until 1:30 when the SPX hit 2025. Then the market dropped for the rest of the day, closing at the SPX 2002 low.
For the day the SPX/DOW lost 1.70%, and the NDX/NAZ lost 1.15%. Bonds gained 26 ticks, Crude dropped $2.20, Gold slipped $3, and the USD was lower. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Last night the FED reported a decline in the Monetary base: $3.738tn v $3.813tn. Today the WLEI was reported higher: 47.7% v 47.6%.
The market gapped down again today hitting SPX 2023. It then rallied to 2032, before hitting a low for the day at 2002. At SPX 2012 it looked like we had five waves down from SPX 2056, and we labeled it Minute wave a of Minor wave c. The rally that followed was kind of small for an expected Minute wave b rally, as it only hit SPX 2025. This now confirmed downtrend has been unfolding as expected. However, the waves within trends do have a tendency to extend from time to time. And, an extension of Minute wave a/ Minor c appears underway. More on this in the weekend update. Best to your weekend!
MEDIUM TERM: downtrend underway
LONG TERM: bull market