SHORT TERM: H&S (?) Tuesday, DOW +14
Overnight the Asian markets gained 0.4%. Europe opened lower but gained 0.8%. US index futures were lower overnight, and at 8:30 the Trade deficit was reported larger: -$48.3B v -$41.9B. The market opened three points below yesterday’s SPX 1987 close, ticked down to 1983, then rallied up to 1992 by 10am. After that the market started to pullback. The market worked its way lower until it hit SPX 1972 at 12:30. Then after rally to SPX 1984 by 2:30, then market dipped to close at 1980.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.65%. Bonds gained 7 ticks, Crude rallied $2.45, Gold rose $11, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Consumer credit at 3pm.
The market opened a bit lower, then rallied to SPX 1992. At the high a potential head and shoulders technical pattern appeared: 1993-2021-1992. The market then had its largest pullback since Friday’s SPX 1894 low. We can now count three waves up from that low using the normal range: 1936-1927-1992. Or just one wave, using the more volatile range. If the rally is now in the fourth wave the 1973 pivot range should hold and higher highs should be next. If the rally just ended, the downside objective would be the gap at the 1956 pivot range and then lower. We tend to favor the four wave pattern at the moment. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum dropped from extremely overbought to neutral. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market