SHORT TERM: third gap down opening in a row, DOW -470
Overnight the Asian markets lost 2.8%. Europe opened lower and lost 2.8% as well. US index futures were significantly lower overnight, and the market gapped down to SPX 1944 at the open. The market had closed at SPX 1972 yesterday. In the opening minutes the SPX dropped to 1931, bounced to 1943, then hit 1926 at 10am. At 10am Construction spending was reported higher: +0.7% v +0.1%, and ISM manufacturing was reported lower: 51.1 v 52.7. The market then rallied to SPX 1941 by 10:30, dropped to 1929 by 11am, hit 1940 by 11:30, and then headed lower. At 2:30 the SPX hit 1917, bounced to 1929 just before 3pm, then hit 1903 by 3:30, and closed at 1914.
For the day the SPX/DOW were -2.90%, and the NDX/NAZ were -3.00%. Bonds gained 11 ticks, Crude dropped $4.05, Gold added $4, and the USD was lower. Medium term support drops to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: ADP at 8:15, Factory orders at 10am, then the FED’s beige book at 2pm.
The market gapped down at the open again today. The gap opening jumped over the 1956 pivot heading straight to the 1929 pivot. Then after a few rally attempts into the SPX 1940’s, the 1929 pivot gave way in the afternoon and the market headed toward the 1901 pivot. A fairly solid down day of 2.9%, which nearly matched the 2.8% declines in Asia and Europe. While the market displayed five swings waves from SPX 1867-1993, we could only quantify a corrective three waves. It certainly looks like a retest of the SPX 1867 low is next. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum hit extremely oversold today, then bounced some in the close. Best to your trading this volatile market!
MEDIUM TERM: downtrend continues
LONG TERM: bull market