SHORT TERM: gap down opening starts week, DOW -24
Overnight the Asian markets gained 0.1%. Europe opened lower and lost 0.6%. US index futures were lower overnight and the market gapped down to SPX 2052 at the open. The market had closed at SPX 2061 on Thursday. The market continued to decline until it hit SPX 2044 around 11am, and then it started to rally. At 2pm the SPX hit 2057, dipped to 2052 by 2:30, then closed at 2057.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.10%. Bonds gained 3 ticks, Crude dropped $1.35, Gold slid $8, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Case-Shiller at 9am, and Consumer confidence at 10am.
A gap down opening to start the New Year’s Eve week took the market right down to support at SPX 2042 (2044). Then after getting sufficiently oversold short term, the market rallied to SPX 2057. This sets up an interesting juncture. We can count five waves up from last week’s SPX 2006 low and now a pullback to anticipated support. Should the market hold the SPX 2044 low it should resume its rally, adding conviction to an uptrend. Should the SPX 2044 low be breached on the downside a retest of the recent lows is likely, adding conviction to the downtrend continuing. This looks like an inflection point for the market. Short term support is at SPX 2042 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold after Thursday’s negative divergence and rebounded. Best to your trading this holiday week!
MEDIUM TERM: up/down trend at inflection point
LONG TERM: bull market