SHORT TERM: odd gap up opening retraced, DOW -34
Overnight the Asian markets gained 0.4%. Europe opened higher but lost 0.2%. US index futures were higher overnight. At 8:30 the CPI was reported higher: +0.3% v +0.4%, Housing starts were reported higher: 1174k v 1036k, and Building permits were reported higher: 1343k v 1275k. The market oddly gapped up at the open, without futures support, to SPX 2129. Then it immediately pulled back to SPX 2121 in the opening minutes. At 10am Consumer sentiment was reported lower: 93.3 v 96.1. After a small bounce the SPX hit its low of the day at 2120 around 10:30. The market then went into a four point trading range until late in the afternoon, when it broke out to SPX 2127 and closed there.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +1.2%. Bonds lost 1 tick, Crude slipped 10 cents, Gold dropped $11, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Today the WLEI was reported lower: 50.6% v 51.2%.
The market gapped up at the open today for the third time this week. After opening at SPX 2129, a new high for the uptrend, the market pulled back to 2120. We can now count five waves up from SPX 2051, and still three waves up from 2045: 2074-2051-2129. Today’s high could have possibly ended the third wave rally. To confirm this, however, we would like to see the market decline below SPX 2110 early next week. If not, we will just assume the third wave is subdividing further. Short term support is now at SPX 2120 and SPX 2102, with resistance at the 2131 and 2198 pivots. Short term momentum declined a bit from this morning’s overbought condition, but closed out the week quite overbought. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market