SHORT TERM: turnaround Tuesday gap down, DOW -190
Overnight the Asian markets gained 0.2%. Europe opened higher but lost 1.2%. US index futures were lower overnight. At 8:30 Durable goods were reported lower: -0.6% v +4.6%, then at 9am Case-Shiller was reported flat: +5.0% v +5.0%, but FHFA prices were reported higher: +0.3% v +0.7%. The market gapped down at the open to SPX 2120 and continued to decline. At 10am New home sales were reported higher: 517k v 481k, and Consumer confidence was reported higher: 95.4 v 95.2. The market then traded down to SPX 2103 just after 11am, bounced to 2109 by 11:30, then headed lower again. At 12:30 FED vice chair Fischer’s speech was released: http://www.federalreserve.gov/newsevents/speech/fischer20150526a.htm. At 3pm the SPX hit 2099 and then bounced to end the day at 2104.
For the day the SPX/DOW were -1.00%, and the NDX/NAZ were -1.15%. Bonds gained 21 ticks, Crude dropped $1.45, Gold slid $17, and the USD rallied. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.
The market opened lower today, took out last week’s low in the first few minutes, and continued to decline throughout the day. Another holiday turning point. The potential choppy impulse uptrend labeling on the hourly ran into trouble immediately when the SPX dropped below 2118. This created an overlap between the two five wave rallies from SPX 2068. When this occurred we posted a tentative green Intermediate wave i on the daily chart. The diagonal triangle uptrend continues to be the most probable scenario. From the SPX 2135 high we can count three waves down thus far: 2123-2134-2099. Should the market be in a downtrend it should take out the 2085 and 2070 pivots next, on its way to the SPX 2040’s or the 2019 pivot. Short term support is at SPX 2096/2099 and the 2085 pivot, with resistance at SPX 2109/2110 and SPX 2118. Short term momentum hit extremely oversold today, then turned higher. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market