SHORT TERM: gap up opening sold, DOW +10
Overnight the Asian markets gained 0.8%. Europe opened higher but lost 0.4%. US index futures were higher overnight, and the market gapped up to SPX 2068 at the open. In the first few minutes the SPX hit 2072 and then began to pullback. At 10am ISM manufacturing was reported lower: 55.5 v 58.7, and Construction spending was reported lower: -0.3% v +1.1%. The pullback continued until 10:30 when the SPX took out Wednesday’s 2058 low and hit 2052. After the that the SPX bounced to 2057 by 11am, dipped to 2049 by 11:30, bounced to 2057 again by noon, then hit 2046 by 1:30. Then the market started to rally. By 3pm the SPX hit 2057 again, pulled back to 2050 by 3:30, rallied to 2062 just before the close, then ended the week at 2058.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.15%. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Wednesday the FED reported an increase in the Monetary base: $3.994tn v $3.738tn. Today the WLEI was reported lower: 46.1% v 46.7%.
The market gapped up at the open today to start the new year. The market ran into resistance in the OEW 2070 pivot range, and then started to pullback. After 10am the market took out Wednesday’s low, then worked its way lower until hitting SPX 2046 around 1:30. This pullback is now more than twice the size of the largest pullback during this uptrend: 48pts. v 20pts. This suggests Minute wave one might have completed at SPX 2092, and not Micro 4 of Minute one. However, we are maintaining the count as is for now. We can count three waves down from SPX 2094: 2058-2072-2046. Then a rally to SPX 2062. Looks like SPX 2058 is the pendulum level short term. Short term support SPX 2058 and SPX 2046, with resistance at the 2070 and 2085 pivots. Short term momentum displayed a positive divergence at the low. Best to your new year weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market