SHORT TERM: gap opening streak broken, DOW +77
Overnight the Asian markets lost 1.8%. Europe opened lower and lost 1.2%. US index futures traded in a 40 point range overnight, but were relatively unchanged heading into the open. At 8:30 weekly Jobless claims were reported lower: 275k v 282k, Export (-1.3% v -0.4)/Import prices (-0.4% v -0.3%) were lower too. The market opened two points below yesterday’s SPX 1942 close, rallied to 1948 in the opening minutes, then started to pullback. At 10am Wholesale inventories were reported lower: -0.1% v +0.9%. Just past 10am the SPX hit 1937, then started to rally. At 11am the SPX hit 1957, pulled back to 1943 by 11:30, then rallied to 1965 by 1:30. After that the market headed lower again. At 3:30 the SPX hit 1945, then bounced to close at 1952.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.90%. Bonds lost 11 ticks, Crude rose $1.55, Gold added $3, and the USD was lower. Medium term support remains at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: the PPI at 8:30, Consumer sentiment at 10am, and the Budget deficit at 2pm.
The market opened about unchanged today, bounced, then took out yesterday’s SPX 1938 low by one point. After that it rallied to SPX 1965 by early afternoon only to rollover and head back into the 1940’s again. This downtrend’s corrective activity continues to suggest it is not done yet. However, if the market can decline in five waves from yesterday’s SPX 1989 high we could see an end to it quite soon. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum rose from oversold early to above neutral, then ended at neutral. Best to your Friday trading!
MEDIUM TERM: downtrend
LONG TERM: bull market