SHORT TERM: oversold rally, DOW +82
Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.2%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 265k v 262k. The market opened one point above yesterday’s SPX 2080 close, ticked up to 2083, then pulled back to 2075 by 10am. Then the market started to rally. Around 12:30 the SPX hit 2093, then pulled back to close at 2088.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.50%. Bonds gained 9 ticks, Crude dropped $2.10, Gold slid $9, and the USD was higher. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: monthly Payrolls (est. +236k) at 8:30, then Wholesale inventories at 10am.
After the futures were sharply lower this morning, below yesterday’s lows, they began to recover heading into the open. The market opened slightly higher, pulled back a bit, then rallied into the SPX 2090’s. The choppy activity for the past two months continues. Despite this activity we do see some symmetry over the past two months. Without getting into detail this symmetry suggests good support in the low SPX 2040’s, and then the 2019 pivot range, as previously noted. If the current decline remains simple, as expected, the next drop should take this market into those support areas. From the recent SPX 2121 high we count two waves, of a potential a-b-c, (a) 2068 and (b) 2093. Short term support is at the 2085 and 2070 pivots, with resistance at the SPX 2120’s and the 2131 pivot. Short term momentum nearly hit overbought today after yesterday’s positive divergence. Best to your Friday trading!
MEDIUM TERM: downtrend likely
LONG TERM: bull market