SHORT TERM: pullback continues, DOW -130
Overnight the Asian markets lost 2.3%. Europe opened higher but lost 0.5%. US index futures were higher overnight, and the market opened two points above yesterday’s SPX 2021 close. The market continued higher until hitting SPX 2027 by 10am when two economic reports were released: Factory orders -0.7% v -0.7%, and ISM services 56.2 v 59.3. After a quick pullback to SPX 2021 the market rallied to 2030 by 10:30. Then it started to decline. Around 11am the SPX broke below the 2019 pivot range and continued lower. Around 12:30 the SPX hit 1996, bounced to 2005 by 1pm, then hit 1992 by 1:30. Then it started to rally. By 2pm the SPX hit 2003, dipped to 1997 by 2:30, rose to 2013 by 3pm, dipped to 2007, then rose to 2017. Then the market dropped to SPX 2003 to end the day.
For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -1.20%. Bonds gained 22 ticks, Crude lost $2.20 Gold rallied $13, and the USD was higher. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the ADP index at 8:15, the Trade deficit at 8:30, then the FOMC minutes at 2pm.
The market started the day on a positive note, rallied to SPX 2030, then headed south into the afternoon. At the low, SPX 1992, the market had retraced over 80% of the 1973-2094 uptrend. Quite unusual, unless of course we are currently in a downtrend. After that low the market staged its best rally since the decline began a week ago Monday. Off that low there were five small waves up: 2003-1997-2013-2007-2017. This in itself is not that conclusive or significant, but potentially the start of a reversal. We continue, despite the decline, to maintain the Minute wave one – Minute wave two count for this uptrend. The Aug13-Jan14 uptrend we noted yesterday, also had an 80+% retracement for its second wave. Short term support is at SPX 1992 and the 1973 pivot, with resistance at the 2019 and 2070 pivots. Short term momentum displayed a slight positive divergence at the low, and the daily RSI is quite oversold. Best to your trading the often volatile FOMC minutes.
MEDIUM TERM: uptrend
LONG TERM: bull market