SHORT TERM: gap down opening, DOW -12
Overnight the Asian markets gained 0.9%. Europe opened lower but gained 0.4%. US index futures were lower overnight. At 8:30 Personal income (+0.4% v +0.4%)/spending (+0.3% v +0.2%) were reported higher, and the PCE was reported higher: +0.1% v +0.1%. The market gapped down at the open to SPX 1981, it had closed at 1988 yesterday. In the opening minutes it ticked down to 1979, and then rallied to 1993 by 11:30. At 10am Consumer sentiment was reported lower: 91.9 v 92.9. The market then pulled back to SPX 1975 by 1:30. After that it worked its way higher for the rest of the day closing at SPX 1989.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.20%. Bonds lost 5 ticks, Crude rallied $2.85, Gold rose $9, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Today the WLEI was reported lower: 49.1% v 49.6%, and GDPN was reported lower: +1.2% v +1.3%. Tomorrow FED vice chair Fischer gives a speech at Jackson Hole at 12:25 et.
The market gap down at the open today for the eighth consecutive gap opening. After a pullback to SPX 1979, the market rallied to a new high at 1993 from Tuesday’s 1867 low. As noted yesterday, this now looks like a potential fives waves up from that low: 1915-1880-1990-1948-1993. But we can still only quantify three waves. Signals mixed for the potential uptrend. While support appears to be around the 1956 pivot, the key resistance level moving forward is to recapture SPX 2040. Unfortunately there are now lots of cross-currents both medium and long term. This will be discussed at length in the weekend update. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 pivot and SPX 2040. Short term momentum displayed a negative divergence at today’s high and ended the week above neutral. Best to your weekend!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market