SHORT TERM: gap down reversal, DOW -261
Overnight Asian markets lost 3.5%. European markets opened higher and gained 0.7%. US index futures were again substantially lower overnight before rising somewhat heading into the open. The market nonetheless gapped down at the open to SPX 2066, bounced to 2069, then headed lower. By 10:30 the SPX hit 2056, then bounced to 2065 by 11am, before hitting 2051 by noon. After that the market drifted higher until around 2pm when it hit SPX 2060 and the FOMC minutes were released: http://www.federalreserve.gov/newsevents/press/monetary/20150708a.htm. The market then declined to SPX 2045 just before 3pm, nearly fully retracing yesterday’s rally. At 3pm Consumer credit was reported lower: $16.1bn v $20.5bn. Heading into the close the market rallied to SPX 2054, then declined to close at 2047.
For the day the SPX/DOW were -1.55%, and the NDX/NAZ were -1.75%. Bonds gained 7 ticks, Crude slid 50 cents, Gold rose $3, and the USD was lower. Medium term support drops back to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30, and a speech from FED governor Brainard at 10am.
The market gapped down at the open for the second day this week. Then after a small bounce to SPX 2069, the high for the day, the market headed lower until it nearly fully retraced yesterday’s entire rally from SPX 2044. It is quite clear Minute C did not end yesterday, and has subdivided into a more complex three wave pattern. Possibly: A 2044, B 2084, C 2045 so far. In fact, the decline from Minute B at SPX 2085 displays a seven wave decline to 2044, a rally to 2084, and now another seven wave decline to 2045. Potentially that was enough. We continue to expect support, for this downtrend, to hold in the lower SPX 2040’s or the 2019 pivot range. Short term support is at SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit slightly oversold during today’s decline. Best to your trading this volatile market!
MEDIUM TERM: downtrend
LONG TERM: bull market