SHORT TERM: gap down opening ends week, DOW -141
Overnight the Asian markets gained 0.6%. Europe opened lower and lost 1.2%. US index futures were lower overnight, and at 8:30 the PPI was reported higher: +0.5% v -0.4%. The market gapped down at the open to SPX 2100, and continued to 2096 in the opening minutes before trying to rally. At 10am the SPX bounced to 2101 and Consumer sentiment was reported higher: 94.6 v 90.7. The market then declined to SPX 2091 by 11am, bounced to 2099 by 11:30, then headed lower again. By 3pm it found support at SPX 2092 then bounced to close at 2094.
For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -0.70%. Bonds lost 3 ticks, Crude slid 75 cents, Gold ended flat, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Today the WLEI was reported lower: 50.9% v 51.0%.
The market gapped down at the open today for its third gap opening this week. After opening at SPX 2100, the market traded down to 2091 and then went into a trading range for the rest of the day. The decline from Thursday’s SPX 2115 high to today’s 2091 low was the first notable pullback since the market started the Tuesday rally at 2072. This suggests, as noted on the hourly chart, that Minute wave c is underway. The short term count still looks fine for this downtrend. More on this and a short term alternative in the weekend update. Best to your weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market