SHORT TERM: another gap down opening, DOW -279
Overnight the Asian markets gained 0.4%. Europe opened higher but lost 0.1%. US index futures were lower overnight. At 8:30 Payrolls were reported better than expected: +295k v +257k, the Unemployment rate dropped to 5.5% v 5.7%, and the Trade deficit improved: -$41.8bn v -$46.6bn. Nevertheless, the market gapped down at the open to SPX 2093, dipped to 2091, and then tried to rally. The market had closed at SPX 2101 yesterday. At 10am the SPX hit 2096 and then started to pullback again. The pullback continued into the afternoon until the SPX found support at 2072 by 1:30. Then after a bounce to SPX 2078 the market moved even lower. Heading into the close the SPX hit 2067, then bounced to end the week at 2071.
For the day the SPX/DOW lost 1.50%, and the NDX/NAZ lost 1.15%. Bonds dropped 34 ticks, Crude slid $1.10, Gold fell $31, and the USD rallied. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Last night the FED reported a decline in the Monetary base: $3.807tn v $3.883tn. Today the WLEI was reported lower: 45.4% v 45.5%.
The market gapped down at the open today for the third time this week. There were no gap up openings this week. Despite the banks passing the FED’s stress test, and Payrolls coming in much better than expected, the market sold the good news. All major assets sold off except the USD. June rate increase fears? We started this week with potentially four short term counts. Until today none of them had been eliminated. With today’s decline below SPX 2072, we can now clearly state we had five waves up from SPX 1981 to 2120. We will cover the implications in the weekend update. Sensing spring is right around the corner, best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market