SHORT TERM: another gap down opening, DOW -76
Overnight the Asian markets lost 0.9%. Europe opened higher but lost 0.6%. US index futures were lower overnight, and the market gapped down to SPX 2059 at the open. The market had closed at SPX 2064 yesterday. In the opening minutes the market ticked up a bit, then dropped to SPX 2056. After that Crude staged a rally and the SPX staged one too. Within minutes the opening gap was closed, and the market rallied to SPX 2080 by 10:30. At 10am Wholesale inventories were reported lower: -0.1% v +0.5%. After that Crude pulled back and the market followed. Heading into noon the market dropped below the opening SPX 2056 low and continued lower. Around 1pm the SPX hit 2037, its lowest level in three weeks, and then tried to rally. The rally lasted until 3:30 when the market hit SPX 2052. Then a dip into the close ended the day at SPX 2048.
For the day the SPX/DOW lost 0.60%, and the NDX/NAZ lost 1.50%. Bonds gained 9 ticks, Crude lost 25 cents, Gold slipped $2, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims and Export/Import prices at 8:30, then the Budget deficit at 2pm.
The market gapped down at the open for the third day in a row. After a quick low at SPX 2056 the market rallied to 2080 by the first hour of trading. After that it dropped below the opening gap low on its way to a three week low at SPX 2037. This kind of wild activity usually occurs during downtrends. This market had stopped looking impulsive after it hit the secondary high at SPX 2104. Since then it has been choppy with wild swings in both directions. The most basic count would be a wave ‘a’ to SPX 2042, a wave ‘b’ to SPX 2094, and a more complex wave ‘c’ underway. We have several counts we are tracking for this ‘c’ wave, awaiting additional market action. Short term support is now at SPX 2037 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit overbought today, then quite oversold at the lows, and was heading back up toward neutral at the close. Best to your trading!
MEDIUM TERM: downtrend probabilities increasing
LONG TERM: bull market