SHORT TERM: consolidation day, DOW +47
Overnight the Asian markets lost 2.2%. Europe opened lower and lost 0.4%. US index futures were higher overnight, and at 9am Case-Shiller was reported unchanged: +5.0% v +5.0%. The market opened four points above yesterday’s SPX 1882 close. In the opening minutes it then made a lower low at SPX 1876. Then it began to rally. At 10am Consumer confidence was reported higher: 103.0 v 101.5. By 10:30 the SPX had hit 1899. After that it dropped to SPX 1979 by 1pm, bounced to 1891 by 1:30, then dropped to 1872 by 3:30. After that low the market spiked higher hitting SPX 1887 before dipping to close at 1884.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were -0.50%. Bonds gained 11 ticks, Crude rose 75 cents, Gold dropped $4, and the USD was lower. Medium term support remains at the 1869 and 1848 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: the ADP index at 8:15, the Chicago PMI at 9:45, a speech from FED chair Yellen at 3pm, then a speech from FED governor Brainard at 8pm.
The market opened higher today, made a slightly lower low than yesterday, then rallied to SPX 1899. After that it headed back down to make another lower low at SPX 1872. Then just as the SPX futures were about to break the overnight low the market surged into the close. We can now count five waves down from SPX 2021: 1953-1980-1909-1953-1872. With the fifth wave subdividing into five waves of its own: 1922-1935-1876-1899-1872. This entire decline could be counted as a retest as it bottomed within 5 points of the August SPX 1867 low. However, it was not exactly the finish we expected for this decline. So we are left with the possibility that the fifth wave is subdividing. Tomorrow should provide that answer. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum rose toward neutral after a positive divergence at the low. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market