SHORT TERM: gap down opening, DOW -203
Last night FED vice chair Fischer gave a speech: http://www.federalreserve.gov/newsevents/speech/fischer20151112a.htm. Overnight the Asian market lost 1.3%. Europe opened lower and lost 0.9%. US index futures were lower overnight, and at 8:30 the PPI was reported lower: -0.4% v -0.5% and Retail sales were reported higher: +0.1% v +0.1%. The market gapped down at the open to SPX 2041 and continued to decline. The market had closed at SPX 2046 yesterday. At 10am Consumer sentiment was reported higher: 93.1 v 90.0, and Business inventories were reported higher: +0.3% v 0.0%. The market continued to decline until 11:30 when the SPX hit 2027. Then it rallied to SPX 2041 just past 12:30, before heading even lower into the afternoon. Nearing the close the SPX hit 2022, then bounced to close at 2023.
For the day the SPX/DOW lost 1.5%, and the NDX/NAZ lost 1.7%. Bonds gained 13 ticks, Crude dropped $1.00, Gold slipped $3, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 47.1% v 46.5%.
The market gapped down at the open today for the second day in a row. By late morning it had entered our Major wave 4 support zone between the 2019 pivot and SPX 2040. After the market started to rally we placed a tentative green “Int. a Major 4” label on the hourly chart. The market then completed its rally to SPX 2041, not closing the gap, and made a lower low at 2022 in the last hour of trading. Still within the range. The market has now done the minimum requirements to complete either Int. a or Major wave 4. We have three waves down from Wednesday’s SPX 2087 high: 2027-2041-2022. Also the daily RSI is oversold, and the hourly MACD is sufficiently oversold as well. Short term support is at the 2019 pivot and SPX 1993, with resistance at SPX 2040 and the 2070 pivot. Short term momentum displays a slight positive divergence at today’s lows. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market