SHORT TERM: gap down opening, DOW -40
Overnight the Asian markets lost 1.2%. Europe opened lower and lost 0.6%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 282k v 291k. The market gapped down at the open to SPX 2051, dipped to 2049, bounced to 2059, and then headed lower, all in the first half hour. The market had closed at SPX 2061 yesterday. By 10:30 the SPX hit 2046, and then started to rally. By noon the SPX had closed the opening gap and then reached 2067 by 2pm. But in the last hour the SPX hit 2057 just past 3pm, bounced to 2062 by 3:30, then closed at 2056.
For the day the SPX/DOW were -0.25%, and the NDX/NAZ were -0.30%. Bonds lost 18 ticks, Crude rallied $2.20, Gold rose $8, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: before the open a speech from FED vice chair Fischer at 6:30, Q4 GDP (est. +2.4%) at 8:30, Consumer sentiment at 10am, then a speech from FED chair Yellen at 3:45.
The market gapped down at the open today, found support at SPX 2046, then rallied to 2067 by the afternoon. Today’s low represented nearly a 70 point decline from Monday’s SPX 2115 high. We could count five small waves down: 2099-2108-2049-2059-2046, before the rally to 2067. Before the open we updated the charts to display a potential: Minute A (2120-2040), Minute B (2040-2115), and Minute wave C underway. At SPX 2040 Minor 2 would form a flat, at SPX 2035 Minute C would equal Minute A, and at the OEW 2019 pivot Minor 2 would form a zigzag. These are the three levels we are monitoring. At today’s low the hourly RSI 5 hit its lowest level in more than 14 years. That’s some serious selling. Should we make a lower low soon, this would set up a nice positive divergence. Short term support is at SPX 2035/2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum rebounded to near neutral during today’s rally. Best to your trading the often volatile GDP report!
MEDIUM TERM: downtrend probability increases
LONG TERM: bull market