SHORT TERM: gap up then pullback, DOW -42
Overnight the Asian markets ended mixed. Europe opened higher and gained 1.3%. US index futures were higher overnight, and the market gapped up to SPX 2124 at the open. The SPX had closed at 2118 on Friday. By 10am the SPX hit a new high at 2126, and then started to pullback. At 1:30 the SPX hit 2111, then went into a trading range for a couple of hours before hitting 2107 just before a 2109 close.
For the day the SPX/DOW were -0.30%, and the NDX/NAZ were -0.45%. Bonds lost 2 ticks, Crude slipped 30 cents, Gold rallied $23, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Case-Shiller at 9am, then Consumer confidence and Senate testimony from FED director Van Der Weide at 10am.
The market gapped up at the open today hitting a new all time high at SPX 2126. Then it appears when the Biotechs went into profit taking mode (-4.2%), after a 50% advance in 6 months, the general market started to pullback. Thus far, from the recent SPX 2072 Minute wave ii low, we have observed what appears to be four waves: 2110-2091-2126-2107. With today’s decline to SPX 2107 we now have an overlap, and the rally is beginning to look a bit sloppy. As a result we are raising our caution level to the 2085 pivot range. Short term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Short term momentum declined to oversold after a negative divergence. Best to your Tuesday trading!