SHORT TERM: gap up opening, DOW +64
Overnight the Asian markets lost 0.3%. Europe opened higher and gained 0.6%. US index futures were higher overnight as well. At 8:15 the ADP was reported higher: 201k v 169k, then at 8:30 the Trade deficit was reported lower: -$40.9bn v -$51.4bn. The market gapped up at the open to SPX 2117, but immediately pulled back. The SPX had closed at 2110 yesterday. In the opening minutes the SPX closed the gap hitting 2110, and then started to rally. At 10am ISM services were reported lower: 55.7 v 57.8. By 10:30 the SPX had hit 2122, and then started to pullback. By 12:30 the SPX had dropped to 2111, then rallied ahead of and into the FED’s Beige book, hitting 2118 around 2:30: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201506.htm. After that a pullback into a SPX 2114 close.
For the day the SPX/DOW were +0.30%, and the NDX/NAZ were +0.35%. Bonds lost 25 ticks, Crude slid $1.45, Gold dropped $8, and the USD was lower too. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims at 8:30.
The market had its second gap up opening this week, and both gaps were closed in the opening minutes of trading. After today’s gap was closed at SPX 2110 the market rallied to 2122, above yesterday’s 2118 high. This suggests the current advance from Tuesday’s SPX 2099 low is an a-b-c rally: 2118-2109-2122. This rally stopped right in the SPX 2117/2122 resistance area before pulling back for the rest of the day. This morning we placed a Minor a at the recent SPX 2099 low, which completed a complex flat. This rally should be a three wave Minor b. When concluded, a three wave Minor c to the downside should follow. 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 hit overbought this morning before heading back to neutral at the close. Best to your trading!
MEDIUM TERM: uptrend appears to be rolling over
LONG TERM: bull market