SHORT TERM: bungee Tuesday, DOW -50
Yesterday, after the close, FED governor Brainard gave a speech in Wash, DC: http://www.federalreserve.gov/newsevents/speech/brainard20151012a.htm. Overnight the Asian markets lost 0.6%. Europe opened lower and lost 0.8%. US index futures were lower overnight, and the market gapped down to SPX 2008 at the open. The market had closed at SPX 2017 yesterday. In the opening minutes the SPX dipped to 2006, then rallied to a higher high at 2022 by 11:30. After that the market pulled back yet again. Heading into the close the SPX hit 2002 by 3:30, then bounced to close at 2004.
For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.75%. Bonds gained 6 ticks, Crude lost 45 cents, Gold rose $5, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: the PPI and Retail sales at 8:30, then Business inventories at 10am, followed by the FED’s Beige book at 2pm.
The market gapped down at the open today, hit SPX 2006, then quickly rallied to 2022. However, instead of continuing to rally it pulled back, and then broke the lows of the day. At today’s SPX 2022 high we can count 9 waves up from 1872. We had counted the first five waves up as Int. i, then a pullback for Int. ii, and Int. iii underway. This count is does not look likely now. With this afternoon’s pullback there is another possible count. The 9 waves up from SPX 1872 represents all of Int. i and an Int. ii pullback is now underway. Int. ii support would be at these levels. Short term support is at SPX 2000 and the 1973 pivot, with resistance at the 2019 pivot and SPX 2040. Short term momentum hit oversold after another negative divergence. Best to your Beige book trading!
MEDIUM TERM: uptrend
LONG TERM: bull market