SHORT TERM: gap down opening, DOW -187
Overnight the Asian markets lost 0.8%. Europe opened lower and lost 1.8%. US index futures were lower overnight as well. At 8:30 Retail sales were reported lower: -0.9% v +0.7%, Export prices lower: -1.2% v -1.2%, and Import prices lower: -0.1% v -0.2%. The market gapped down at the open to SPX 2006, declined to 2001, then rallied to 2013 just before 10am. At 10am Business inventories were reported higher: +0.2% v +0.2%. The market then headed lower in a choppy pattern until it hit SPX 1988 around 1:30. The market then started to drift higher ahead of the FED’s Beige book report: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201501.htm. After the release the market rallied to SPX 2009 by 2:30, pulled back to 2000 by 3pm, then hit 2013 by 3:30. After that the market dipped to close at SPX 2011.
For the day the SPX/DOW were -0.80%, and the NDX/NAZ were -0.50%. Bonds gained 12 ticks, Crude rallied $2.45, Gold slipped $2, and the USD was lower. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims, the PPI, and the NY FED at 8:30; then the Philly FED at 10am.
The market gapped down at the open, bounced, and then took out support at SPX 1992 by early afternoon. This suggests the recent activity from SPX 1992-2064-1988 was at best an ABC Minute wave ii flat. If this weakened uptrend is ever going to enter a Minute wave iii, the time is now. We also posted an alternate count on the SPX daily chart. This suggests the December SPX 2079 high ended Major wave 3. And, the downtrend/uptrend since then were Intermediate waves A and B of an irregular Major wave 4. With the NDX in a Major wave 4 since late November this appears to be another probable count.
Should the market rise in five waves from SPX 1988 we should have a Minute iii underway. If not, and it starts to make lower lows the first support is the 1956/1973 pivots. After that we are looking at possibly the 1869/1901 pivots. We should get our answer before the end of the week. Short term support is at SPX 1988 and the 1973 pivot, with resistance at the 2019 pivot and SPX 2058. Short term momentum finally respected the positive divergence and rose to about neutral. Best to your trading this day traders market!
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market