SHORT TERM: gap up opening sold again, DOW -106
Overnight the Asian markets gained 1.8%. Europe opened higher and gained 2.1%. US index futures were higher, lower, higher overnight. At 8:30 weekly Jobless claims were reported higher: 316k v 294k, the PPI was reported lower: -0.3% v -0.2%, and the NY FED was reported higher: +9.9 v -3.6. The market gapped up at the open to SPX 2020, ticked up to 2021, and then started to pullback. The market had closed at SPX 2011 yesterday. At 10am the Philly FED was reported lower: 6.3 v 24.5. The market then made a low at SPX 1999, rallied to 2016 by 10:30, then made as lower low at 1993 by 12:30. Then the market tried to rally. The rally lasted until 3pm when the SPX hit 2004. Then the market made a lower low on the day at SPX 1991, just before a 1993 close. First close under 2000 since the downtrend low in December.
For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -1.40%. Bonds gained 28 ticks, Crude fell $2.30, Gold rallied $30, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the CPI at 8:30, Industrial production at 9:15 (est. -0.2%), Consumer sentiment at 10am, and it’s options expiration Friday.
The market gapped up for the second time this week, and just like the first time it headed lower within the first 1/2 hour of trading. The three wave rally we observed yesterday from SPX 1988: 2009-2000-2013 peaked out at 2021 this am. Then the market dropped below SPX 2009 shortly after the open, making the rally just another corrective bounce. After that the market traded down to SPX 1993, then entered a trading range for the rest of the day before breaking lower in the last few minutes. While the market did not break through yesterday’s SPX 1988 low, keeping the Minute wave ii flat scenario alive. We did not observe any impulsive action to suggest this pullback might be over. Should the market break SPX 1988, one of the two pivots should provide support. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and SPX 2057. Short term momentum did not move much above neutral during today’s continuation rally attempt, and ended the day below it. Best to your opex trading tomorrow!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market