SHORT TERM: market decline continues, DOW -97
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.2%. US index futures were higher overnight, but started to fade about 1.5 hours ahead of the open. The market opened four points above Friday’s SPX 2045 close, and that was the high for the day as the market immediately started to pullback. By 10am the SPX had dropped below Friday’s 2038 low, and hit 2023. Then the market tried to rally. At 11am the SPX hit 2036, then reversed and headed lower. A stair-step pattern took the market back to SPX 2023 by 3:30. Then the market rallied to SPX 2033 before closing at 2028.
For the day the SPX/DOW were -0.65%, and the NDX/NAZ were -0.95%. Bonds gained 16 ticks, Crude lost $2.50, Gold rallied $11, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the Treasury budget at 2pm.
The market opened higher today, then immediately began to pullback. About 1.5 hours before the open SPX futures were +0.5%, and the DAX was +1.5%. Two hours later, about 1/2 hour after the market opened, the SPX was -1.0% and the DAX was +0.25%. Quite a decline in just two hours time. About 15 minutes into the open the SPX broke through the 2030 support level we have been noting. After hitting SPX 2023, the market rallied to 2036, then vacillated above and below that 2030 level for the rest of the day. Currently the short term trend appears to be in favor of the sellers. This is unlikely to change until the SPX can rally above 2053. Short term support is at the 2019 pivot and SPX 1992, with resistance at SPX 2053 and the 2070 pivot. Short term momentum was quite oversold at today’s low, and ended oversold. We removed the tentative green label, but still feel the market is in a wave 2 pullback. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market