SHORT TERM: pullback resumes, DOW -92
Overnight the Asian markets lost 0.3%. Europe opened lower but gained 0.6%. US index futures traded around neutral all night. At 8:30 Personal income (+0.4% v +0.5)/spending (+0.2% v +0.9%) were reported higher, as were PCE prices: +0.1% v +0.1%. The market opened two points above Friday’s SPX 2104 close and then began to pullback. In the opening minutes the market hit SPX 2098, then bounced to 2104 by 10am. At 10am ISM manufacturing was reported lower: 52.7 v 53.5, and Construction spending was reported higher: +0.1% v +0.8%. The market pulled back to SPX 2097 by 10:30, then rallied to 2105 by 11:30. Around 11am FED governor Powells’ speech was released: http://www.federalreserve.gov/newsevents/speech/powell20150803a.htm. Then market then headed lower hitting SPX 2087 just past 1pm. For the rest of the day the market worked its way higher and closed at SPX 2098.
For the day the SPX/DOW were -0.40%, and the NDX/NAZ were -0.20%. Bonds gained 13 ticks, Crude dropped $1.70, Gold slid $8, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Factory orders at 10am.
The market opened two points higher to start the week, but then immediately started to pullback. After a choppy beginning to the day the market broke below SPX 2095 just past 12:30, then continued down to 2087. The drop below SPX 2095, which was initial support, confirms the recent rally from SPX 2064 was indeed a corrective three waves: 2011-2095-2114. The choppiness continues. As a result we labeled the recent high Minute wave b. A lower Minute wave c should now be underway. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2114 and the 2131 pivot. Short term momentum was quite oversold at the lows, but ended the day neutral after Friday’s negative divergence. Best to your trading!
MEDIUM TERM: uptrend still choppy
LONG TERM: bull market