SHORT TERM: market in pullback mode, DOW -10
Overnight the Asian markets gained 0.2%. Europe opened lower but gained 0.6%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 313k v 283k, the CPI was reported lower: -0.7% v -0.4%, but Durable goods were reported higher: +2.8% v -3.3%. Then at 9am the FHFA was reported higher: +0.8% v +0.8%. The market opened one point below yesterday’s SPX 2014 close, then pulled back to SPX 2106 by 10am. After that it rallied to SPX 2014 by 11am, before starting a choppy pullback to 2104 by just after 3pm. Then the market rallied to close at SPX 2111.
For the day the SPX/DOW were -0.10%, and the NDX/NAZ were +0.45%. Bonds lost 19 ticks, Crude dropped $1.95, Gold added $3, and the USD rallied. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Q4 GDP (est. +2.0%) at 8:30, the Chicago PMI at 9:15, Consumer sentiment and Pending home sales at 10am, then a speech from FED vice chair Fischer at 1:30.
The market opened lower today, like it has done for about two weeks. It dipped down to SPX 2106 by 10am, bounced to 2114 by 11am, hit 2104 just after 3pm, then rallied into the close. Our initial short term concern level, at SPX 2102, was not hit today, but the market did set up a potential short term positive divergence at the 2104 low. As the NDX/NAZ tried to rally all day, the cyclicals appeared to be held in check by the strong USD rally +1%, and the 5% drop in Crude at its lows. Nevertheless, we do see five waves up from the SPX 1981 downtrend low, with each rising wave shorter than the previous one. This suggests a few potential short term scenarios. But we will await either new highs or a drop below SPX 2102 before getting into any detail. Q2 GDP tomorrow could be the catalyst. Short term support is at SPX 2104 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market