SHORT TERM: pullback continues, DOW -157
Overnight the Asian markets lost 1.0%. Europe opened lower and lost 1.0% as well. US index futures were flat overnight, then at 8:30 the PPI was reported lower: -0.5% v 0.0%, and Retail sales were reported higher: +0.1% v +0.2%. The market opened unchanged at SPX 2004, dipped to 2001 in the opening minutes, then rallied to 2010 by 10am. At 10am Business inventories were reported flat: 0.0% v +0.1%. After that the market declined below SPX 2000 to 1994 by 11:30. After a rally to SPX 2006 by 1pm the market headed lower again. At 2pm the FED released its Beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201510.htm. At 3pm the SPX hit 1991, then bounced to close at 1994.
For the day the SPX/DOW were -0.70%, and the NDX/NAZ were -0.20%. Bonds gained 22 ticks, Crude lost 5 cents, Gold rallied $19, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims, the CPI and the NY FED at 8:30, then the Philly FED at 10am and the Treasury budget at 11am.
The market opened flat today, took out yesterday’s low in the first few minutes, bounced, and then headed lower. At today’s low the market has now had its largest pullback (2022-1991) since the rally began at SPX 1872 two weeks ago. This market activity fits with an Int. ii of Major 3 underway, and we updated the hourly/daily charts. There are four potential levels of Fibonacci support SPX: 1987, 1965, 1947 and 1929. Today’s low is close to the first, a 23.6% retracement. The others are quite close to the 1973, 1956 and 1929 pivots, which represent the 38.2%, 50.0%, and 61.8% retracements. Since this is a larger third wave, Major 3, would expect the pullback to be relatively small, i.e. the 1973 or 1956 pivots. With Industrial production reported on Options expiration Friday, Int. ii could be over by Friday//Monday. Short term support is now at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum is displaying a very slight positive divergence at today’s low. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market