SHORT TERM: gap up opening, DOW +126
Overnight the Asian markets lost 1.0%. Europe opened lower but gained 0.5%. US index futures were higher overnight, and the market gapped up at the open to SPX 1966. At 10am Existing home sales were reported lower: 5.31mn v 5.59mn. The market hit SPX 1980 at 10:30 and then started to pullback. By 1:30 the opening gap was closed when the SPX hit 1956. Then the market started to rally again. At 3pm the SPX it 1972, dropped to 1962 by 3:30, then bounced to 1967 to end the day.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.15%. Bonds lost 17 ticks, Crude rallied $1.55, Gold dropped $7, and the USD was higher. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: the FHFA at 10am.
The market gapped up at the open today following Friday’s short term positive divergence at the close. After what appears to be five waves down from SPX 2021 to 1953: 1987-2000-1963-1979-1953. The market looks to be rallying in an a-b-c off that low: 1980-1956-xxxx. If the rally continues into tomorrow the ‘c’ wave should end between SPX 1980 and 2000. If the market fails to reach the SPX 1980 level tomorrow, then 1980 was the high and the next five down sequence is already underway. Either way expecting more downside pressure ahead. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market