SHORT TERM: gap up opening sold, DOW -27
Overnight the Asian markets finished mixed. Europe opened higher and closed +1.1%. US index futures were higher overnight, and continued to move higher into the open. The market gapped up at the open to SPX 2046 and continued higher. The SPX had closed at 2028 yesterday. By 10am the SPX had reached 2057, and then began to pullback. At 12:30 the SPX hit 2037, bounced to 2042 by 1pm, then accelerated to the downside. Around 2:30 the SPX hit 2008, and tried to rally. At 2pm the Treasury reported another surplus: +$1.9bn v +$53.2bn. The market then rallied to SPX 2021 by 3pm, dropped to 2010 just past 3pm, rallied to 2029 by 3:30, then dipped to close at 2023.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.10%. Bonds gained 6 ticks, Crude rose 50 cents, Gold slipped $3, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Retail sales and Export/Import prices at 8:30, Business inventories at 10am, then the FED’s beige book at 2pm.
The market gapped up today at the open, rallied to SPX 2057, then began to pullback. The pullback was much bigger than it should have been for the wave scenario we have been tracking. The sharp pullback off the SPX 2094 uptrend high to 1992 by early January, was acceptable within an overall uptrend if the market rallied sharply off that low. It did rally to SPX 2064, pulled back to 2023 by yesterday, and then rallied into early this morning to a lower 2057 high. After that it broke down through the SPX 2023 level. This certainly does not fit what we were expecting for the December uptrend to continue. The activity since the beginning of the year is now looking more like a corrective/downtrend. We now have to consider that the SPX 1992 low was an A wave, the rally to 2064 was a B wave, and wave C is underway. We have both counts posted until this inflection point clears. Short term support is at the 2019 and 1973 pivots, with resistance at SPX 2057 and the 2070 pivot. Short term momentum is displaying a positive divergence. Day traders market, best to your trading!
MEDIUM TERM: uptrend now under pressure
LONG TERM: bull market