SHORT TERM: gap down opening, DOW -333
Overnight the Asian markets lost 0.7%. Europe opened lower and lost 1.4%. US index futures were lower overnight, and the market gapped down at the open to SPX 2064. The SPX had closed at 2079 yesterday. In the opening minutes the SPX hit 2056, then bounced to 2061 by 10am. At 10am Wholesale inventories were reported higher: +0.3% v +0.1%. The market then pulled back to SPX 2053 by 10:30, rallied to 2062 by 11:30, and then headed lower again. At 12:30 the SPX hit 2049, bounced to 2055 by 1:30, dipped to 2048 by 3pm, bounced to 2053 by 3:30, then closed at the day’s low 2044.
For the day the SPX/DOW were -1.75%, and the NDX/NAZ were -1.80%. Bonds gained 16 ticks, Crude dropped $1.35, Gold slid $5, and the USD was higher again. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Yesterday, long term investor sentiment was reported bearish: 47.8% v 57.2%. Tomorrow: the Budget deficit at 2pm.
The market gapped down at the open today for the fourth time in the past six trading days. At the open it broke through the Fibonacci SPX 2067 support level, then headed to the Fibonacci SPX 2051 support level. In the afternoon the market dipped below that level by a few points (SPX 2048), held, the broke lower into the close. While there is a good positive divergence on the DOW chart, we have yet to see a substantial rally. This suggests the SPX will likely hit the next Fibonacci support level at SPX 2034, unless it can rally above 2066 from current levels. Short term support is at SPX 2034 and the 2019 pivot, with resistance at SPX 2051 and SPX 2067. Short term momentum ended the day extremely oversold. Best to your Wednesday trading!
MEDIUM TERM: uptrend
LONG TERM: bull market