SHORT TERM: gap down opening then rebound, DOW -28
Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.6%. US index futures were lower overnight, and the market gapped down to SPX 2105 at the open. The SPX had closed at 2112 yesterday. In the opening minutes the SPX made its low for the day at 2099, then began to rally. At 10am Factory orders were reported lower: -0.4% v +2.1%, and FED governor Brainard’s speech was released: http://www.federalreserve.gov/newsevents/speech/brainard20150602a.htm. The market continued to rally into the afternoon when it closed the opening gap and hit SPX 2118. Then it started to pullback again. At 3:30 the market hit 2109, then ticked up to close at 2110.
For the day the SPX/DOW were -0.15%, and the NDX/NAZ were -0.20%. Bonds lost 19 ticks, Crude rose $1.10, Gold added $5, and the USD declined. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ADP at 8:15, Trade deficit at 8:30, ISM services at 10am, then the FED’s Beige book at 2pm.
The market pulled back from 2119 resistance late yesterday afternoon, gapped down this morning into support at 2099, then rallied back to 2118 resistance again this afternoon. Another choppy day. However, we now have a decline, in the form of a flat, from the SPX 2135 high: 2099-2126-2099. Today’s rally to SPX 2118 may be all, or part, of a rebound before the market makes another a-b-c lower. As a result we continue to lean to the downside with an expected downtrend underway. Short term support remains at SPX 2096/2099 and the 2085 pivot, with resistance at SPX 2117/2122 and the 2131 pivot. Short term momentum touched oversold, rebounded, then ended the day under neutral. Best to your trading the Beige book!
MEDIUM TERM: uptrend appears to be rolling over
LONG TERM: bull market