SHORT TERM: gap down opening, DOW -291
Overnight the Asian markets gained 0.7%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and headed steeply lower after some weak earnings reports. At 8:30 Durable goods were reported lower: -3.4% v -0.9%, then at 9am Case-Shiller was reported lower: +4.3% v +4.5%. The market gapped down at the open to SPX 2033 and continued to fall. The market had closed at SPX 2057 yesterday. In the opening minutes the SPX hit 2028, bounced to 2036, then headed lower. At 10am Consumer confidence was reported higher: 102.9 v 92.6, and New homes sales were reported higher: 481k v 438k. The market then hit the low for the day at SPX 2020 by 10:30, and started to rebound. After a rally to SPX 2040 by 1:30, the market dipped to 2035, and then headed higher. At 2:30 the SPX hit 2043, then declined to 2030 to end the day.
For the day the SPX/DOW were -1.50%, and the NDX/NAZ were -2.25%. Bonds gained 8 ticks, Crude added 85 cents, Gold rose $14, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the FED completes its two day FOMC meeting.
The market gapped down at the open for the sixth straight day of gap openings. In the opening minutes the SPX dropped below our 2029 support level on its way to 2020. This opening decline has overlapped the first wave of the three wave structure we noted yesterday: 2029-2004-2065. This suggests the rally from the recent SPX 1988 low was yet another a-b-c advance during this choppy month of January. As a result we switched our preferred count to the one posted on the SPX daily chart, and the hourly chart count is now the alternate. This suggests the market has been in correction mode since the late-December high at SPX 2094. And, it is still in the process of completing an irregular Major wave 4 correction from the early-December high at SPX 2079. Should the 2019 pivot fail to hold support, then the 1973 pivot would be the next support. Short term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit quite oversold during the decline then bounced to just below neutral. Best to your trading the often volatile FOMC day.
MEDIUM TERM: downtrend gains probability
LONG TERM: bull market