SHORT TERM: gap up opening, DOW -100
Overnight the Asian markets lost 0.9%. Europe opened lower and lost 2.3%. US index futures were higher overnight. At 8:30 the NY FED was reported contracting: -3.6 v +10.2, then at 9:15 Industrial production was reported higher: +1.3% v -0.1%. The market gapped up at the open to SPX 2014, rallied to 2019 in the opening minutes, and then began to pullback. The SPX had closed at 2002 on Friday. At 10am the NAHB index was reported lower: 57 v 58, and the SPX hit 1998. After a rally to SPX 2007 by 10:30, the SPX dropped to 1982 by noon. After that it started to rally. At 1pm the SPX hit 2002, pulled back to 1991 just past 2pm, rallied to 2001 by 2:30, then dropped to close at 1990.
For the day the SPX/DOW were -0.60%, and the NDX/NAZ were -1.00%. Bonds lost 9 ticks, Crude dropped $2.60, Gold slumped $29, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Housing starts and Building permits at 8:30, plus the FED starts its two day FOMC meeting.
The market gapped up at the open today, hit the 2019 exactly, and then headed lower for the rest of the day in very choppy trading. In fact, we have not seen this type of wild swinging activity since nearing the downtrend low in mid-October. The short term wave pattern took on a life of its own after today’s SPX 2019 high with a series of overlapping waves down to 1982. The very short term count we are now tracking suggests one more lower low tomorrow, and then a decent rally. Short term support remains at the 1973 and 1956 pivots, with resistance at the 2019 pivot and SPX 2056. Short term momentum rallied at the open off Friday’s positive divergence, then vacillated above/below oversold for the rest of the day. Day traders market – best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market