SHORT TERM: pullback continues, DOW -160
Overnight the Asian markets that were open gained 0.4%. European markets that were open gained 0.4% as well. US index futures were higher overnight, and at 9:15 the Chicago PMI was reported lower: 58.3 v 60.8. The market opened four points above Tuesday’s SPX 2080 close, dipped to 2081, then bounced to 2086 by 11am. Then the market started to pullback. At 12:30 the SPX hit 2074, bounced to 2078 by 1:30, then dropped to 2066 by 3pm. After a rally to SPX 2071 by 3:30 the market dropped to 2058, then closed at 2059.
For the day the SPX/DOW were -0.95%, and the NDX/NAZ were -1.00%. Bonds gained 3 ticks, Crude dropped 35 cents, Gold slid $15, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.
The market opened higher today, rallied to 2086, then resumed the pullback that started on Monday. Last night we noticed that Micro wave 3 (1992-2094) was exactly 2.618 times Micro wave 1 (1973-2012). Micro wave 2 (2012-1992) was 20 points for a 50% retracement, and Micro wave 4 (2094-2058) thus far is 36 points. We expected the 2070 pivot range (2063-2077) to provide support for Micro 4, but it failed to do so in the last hour. This suggests the next level of support is around a 38.2% retracement, i.e. SPX 2055. Short term support is now at SPX 2055 and SPX 2043, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day extremely oversold. Happy New Year to all readers and participants!
MEDIUM TERM: uptrend
LONG TERM: bull market