SHORT TERM: market pulls back, DOW -31
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.4%. US index futures were lower overnight but the market opened unchanged at SPX 2089. In the opening minutes the market bounced to SPX 2093, then dipped to 2088 by 10am. At 10am Existing home sales were reported lower: 5.36M v 5.55M. The market then rallied to SPX 2096, one point below Friday’s high. After that it started to pullback. The pullback continued until about 2:30, when the SPX hit 2081. After that the market rallied into the close to end the day at SPX 2087.
For the day the SPX/DOW lost 0.15%, and the NDX/NAZ lost 0.15%. Bonds gained 3 ticks, Crude was flat, Gold dropped $9, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2145 pivots. Tomorrow: Q3 GDP (est. +2.1%) at 8:30, Case-Shiller at 9am, and Consumer confidence at 10am.
The market opened unchanged today, bounced around a bit, then resumed the pullback that had started on Friday with the short term negative divergence. At today’s low, SPX 2081, the market had pulled back 16 points from Friday’s high, and did get sufficiently oversold for a short term low. As a result of the recent market action we are labeling SPX 2097 as Minor wave 1 and the recent pullback as Minor 2, of Intermediate wave iii. This was covered in the weekend update. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2116 and the 2131 pivot. Short term momentum hit oversold during the decline and bounced into the close. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market