SHORT TERM: turnaround Tuesday, DOW -142
Overnight the Asian markets open lost 0.7%. Europe opened lower and lost 1.8%. US index futures were lower overnight, and at 8:30 the Trade deficit was report wider: -$51.4bn v -$35.4bn. The market opened one point below yesterday’s SPX 2114 close, ticked up to 2115, then started to pullback. At 10am the SPX hit 2104, and ISM services were reported higher: 57.8 v 56.5. The market then bounced to SPX 2109 by 10:30. After that the market pulled back to SPX 2096 by 11:30, bounced to 2103 by 12:30, then headed lower again. The choppy move lower continued into the afternoon as the SPX hit 2088 by 3pm, 2094 by 3:30, then closed at 2089.
For the day the SPX/DOW were -1.00%, and the NDX/NAZ were -1.60%. Bonds lost 9 ticks, Crude rallied $1.50, Gold added $4, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ADP index at 8:15, then a speech by FED chair Yellen at 9:15.
The market opened slightly lower today, ticked up, then pulled back for the rest of the day. After hitting a high at SPX 2121 in the first half hour of trading yesterday, the market hit a low of 2088 late today. Either SPX 2121 was a secondary high of this uptrend, or the choppiness continues until the diagonal triangle is completed. Europe had been generally rising for the past 4 to 6 months, while the SPX has remained in a trading range. Several of the European indices topped around mid-month and are now in confirmed downtrends. If the market could not break out during multi-month uptrends in Europe, it seems unlikely the SPX will be making new highs now. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2121 and the 2131 pivot. Short term momentum hit extremely oversold at today’s lows. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market