SHORT TERM: gap down opening then rebound, DOW +6
Overnight the Asian markets were mixed. Europe opened lower but gained 0.7%. US index futures were much lower overnight, then gradually rebounded just before the open. At the open the market gapped down to SPX 2047 and continued to decline. The SPX had closed at 2052 on Friday. In the first 15 minutes the SPX traded down to 2041, the low for the day, and then began to rally. By 11am the SPX turned positive at 2054, dipped to 2049 by 11:30, then hit 2058 by 2pm. Then after a pullback to SPX 2052 by 3:30 the market closed at 2057.
For the day the SPX/DOW were +0.15%, and the NDX/NAZ were mixed. Bonds lost 5 ticks, Crude slipped 45 cents, Gold dropped $13, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Durable goods at 8:30, Case-Shiller at 9am, then Consumer confidence and New home sales at 10am.
The market gapped down at the open for the fifth gap opening in a row: 3 down – 2 up. After pulling back to SPX 2041 the market rallied to fill the gap turning positive by midday. Then closed up for the day. We can count three waves up from the SPX 1988 low: 2029-2004-2065. Then a potential fourth wave pullback to 2041, with now a fifth wave advance to 2058 thus far. Should the market hit SPX 2065 next, this rally will start to look more and more impulsive. Short term support remains at SPX 2029 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold during today’s pullback then bounced to just above neutral. Best to your trading!
MEDIUM TERM: uptrend range bound
LONG TERM: bull market