SHORT TERM: choppy day, DOW -13
Last night FED governor Brainard gave a speech after the market closed: http://www.federalreserve.gov/newsevents/speech/brainard20150930a.htm. Asian markets gained 1.0%. Europe opened higher but lost 0.7%. US index futures were volatile overnight, and at 8:30 weekly Jobless claims were reported higher: 277k v 267k. The market gapped up at the open to SPX 1926, ticked up to 1927, then started to pullback. The market had closed at SPX 1920 yesterday. At 10am Construction spending was reported higher: +0.7% v +0.7%. Also at 10am the SPX hit 1909. Then it rallied to SPX 1922 by 10:30, and then hit the low of the day 1901 at noon. After that it rallied for the rest of the day: hitting SPX 1925 just before a 1924 close.
For the day the SPX/DOW were mixed, and the NDX/NAZ gained +0.2%. Bonds gained 2 ticks, Crude ended flat, Gold slipped $1, and the USD was lower. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: monthly Payrolls (est. +200k) at 8:30, then Factory orders at 10am. There is also a speech from FED vice chair Fischer at 1:30.
The market gapped up at the open for the second day in a row. However unlike yesterday, this gap up was over within minutes of the opening as the market immediately headed lower. After hitting SPX 1927, for three waves up from 1872: 1917-1897-1927, the market then did three waves down: 1909-1922-1901. Notice the rally stopped at the 1929 pivot, and the decline at the 1901 pivot. This leaves use with five waves from Tuesday’s SPX 1872 low: 1917-1897-1927-1901-1925. This choppy action is not what we were expecting. We were looking for a clean five waves up. For now we have overlapping waves. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum hit slightly overbought, dropped to neutral, and then went back to overbought at the close. Best to your trading tomorrow’s Payroll numbers!
MEDIUM TERM: uptrend
LONG TERM: bull market