SHORT TERM: red Monday follows blood moon, DOW -313
Overnight the Asian markets lost 1.1%. Europe opened lower and lost 2.5%. Early this morning FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20150928a.htm. At 8:30 Personal income (+0.3% v +0.4%) / spending (+0.4% v +0.3%) was reported higher, and PCE prices were reported higher: +0.1% v +0.1%. The market gapped down at the open to SPX 1918. The market had closed at SPX 1931 on Friday. After the open the market continued lower until it hit SPX 1903 by 10:30. At 10am Pending home sales were reported lower: -1.4% v +0.5%. Then after a bounce to SPX 1911 by 11am, to market dropped to SPX 1880 just after 2pm. A bigger bounce followed to SPX 1891 just before 3pm, then the market hit a lower low at 1879 just past 3pm. Heading into the close the SPX bounced again to 1889, then dropped to 1882 to end the day.
For the day the SPX/DOW were -2.25%, and the NDX/NAZ were -2.95%. Bonds gained 19 ticks, Crude dropped $1.20, Gold dropped $14, and the USD was lower. Medium term support drops to the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: Case-Shiller at 9am, then Consumer confidence at 10am.
The market gapped down at the open, then exceeded last week’s SPX 1909 low in the first hour of trading. After that it headed lower, with several bounces along the way, to SPX 1879. Quite a drop for one day of trading. The impulse wave from SPX 2021 continues to unfold: 1953-1980-1909-1953-1879 (so far). The 5th wave down has thus far subdivided into three waves, expecting five: 1922-1935-1879. Short term momentum ended the day at extremely oversold, expecting a 4th wave bounce soon. Then the market should complete the 5th wave down, between the 1828 and 1869 pivots, to possibly end the downtrend and Primary IV. Defensive positions (hedging) remain favored, as they have been for many weeks. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market