SHORT TERM: pullback then rebound, DOW +225
Overnight the Asian markets lost 0.6%. Europe opened lower but gained 0.1%. US index futures bounced around overnight, and at 8:30 weekly Jobless claims were reported lower: 265k v 307k. The market opened two points above yesterday’s SPX 2002 close. No gap opening today. After a bounce to SPX 2007 the market dropped to 1993, and then rallied to 2003 by 10am. At 10am Pending home sales were reported lower: -3.7% v +0.8%. The market pulled back to SPX 1989 by 11am, and then started to rally. Around noon the market hit SPX 2005, pulled back to 1998 by 1pm, then moved higher. Around 3:30 the SPX hit 2025, then dipped to close at 2021.
For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +1.00%. Bonds lost 12 ticks, Crude added 10 cents, Gold dropped $27, and the USD was higher. Medium term support rises to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Q4 GDP (est. +3.2%) at 8:30, then the Chicago PMI and Consumer sentiment near 10am.
The market opened higher today, then resumed the post-FOMC decline. After hitting SPX 1989, 48 points from the post-FOMC high, the market rebounded to 2025. The rally off that low had small pullbacks along the way. So for now it looks like a counter-trend rally. With the expectation of a downtrend confirmation soon, we would normally expect the downtrend to make an important low next week. Levels to watch for are the three pivots: 1973, 1956 and 1929. Should the market continue to rally from today’s low, we would like to see five waves unfold before expecting new highs. Other than that, a rally from today’s low would be considered just another counter trend advance. Short term support is at SPX is now at the 2019 pivot and SPX 1988/1992, with resistance at SPX 2037 and the 2070 pivot. Short term momentum rose to just below overbought after this morning’s extremely oversold condition. Best to your trading GDP day!
MEDIUM TERM: awaiting downtrend confirmation
LONG TERM: bull market