SHORT TERM: volatile night quieter open, DOW -78
Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.5%. US index futures were sharply lower overnight, then rebounded early this morning. At 8:15 the ADP index was reported lower: 189k v 212k. The market opened three points below yesterday’s SPX 2068 close, and immediately started to move lower. By 10am the SPX hit 2048, then started to rally. At 10am ISM manufacturing was reported lower: 51.5 v 52.9, and Construction spending was reported lower too: -0.1% v -1.1%. The rally continued until 11:30 when the SPX hit 2063. Then after a pullback to SPX 2054 by 12:30 the market rallied to 2062 by 2pm, then pulled back to 2054 again by 3pm. After that the market bounced to close at SPX 2060.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.45%. Bonds Gained 15 ticks, Crude rallied $2.00, Gold rose $19, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims and the Trade deficit at 8:30, a speech from FED chair Yellen at 8:40, Factory orders at 10am, then a speech from FED governor Brainard at 3:45pm.
The market opened at SPX 2065, well above the suggested open of the overnight lows (SPX 2042). The market then immediately pulled back to SPX 2048 in the first half hour of trading. Then after getting extremely oversold the SPX tried to get something going on the upside: 2063-2054-2062-2054. So far this could be counted as a 1 – 2 (flat) upwards. But if SPX 2054 gives way we are likely to go even lower. If SPX 2063 is exceeded on the upside an impulsive pattern is possible. With Friday a holiday, we may get resolution to this pullback/correction tomorrow/Monday. Turning points often occur around holidays. Short term support is at SPX 2054 and SPX 2046, with resistance at the 2070 and 2085 pivots. Short term momentum rebounded to just below neutral, from this morning’s extremely oversold condition. Best to your trading!
MEDIUM TERM: uptrend until it fails
LONG TERM: bull market