SHORT TERM: gap down opening, DOW -180
Overnight the Asian markets gained 0.3%. European markets opened lower and lost 1.3%. US index futures were lower overnight and the market gapped down to SPX 2091 at the open. The market had closed at SPX 2099 on Friday. With only a 3 point bounce along the way, the market declined to SPX 2068 by noon. Then the market tried to rally. The rally hit SPX 2078 by 2:30, pulled back 2072 just past 3pm, then hit 2083 just before a 2079 close.
For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 1.05%. Bonds lost 4 ticks, Crude slipped 25 cents, Gold rose $3, and the USD was lower. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: Export/Import prices at 8:30, then Wholesale inventories at 10am.
The market gapped down at the open for the first time since the end of October. After breaking through recent support at SPX 2084 the market slid to 2068 by noon. During the slide we updated the hourly/daily charts to display a Major wave 3 high at SPX 2116, and Major wave 4 underway. The current decline is the largest, 48 points, since Major wave 2 was underway in September. Thus far we see a corrective pullback from the Major wave 3 high: 2090-2104-2084-2099-2068-2083. Since Major wave 2 was a multi-week event, we are expecting Major 4 to also take some time to unfold. This would suggest the market could continue to be choppy for the next couple of weeks. Too early to suggest a Major 4 pattern, but a flat alternating with the Major wave 2 irregular zigzag would not surprise. Short term support is now at the 2070 pivot and the SPX 2040’s, with resistance at the 2085 pivot and SPX 2120. Short term momentum was quite oversold at today’s lows, then rose to near neutral during the rally. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market