SHORT TERM: pullback day, DOW -117
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 0.7%. US index futures were lower overnight, and the market opened four points below yesterday’s SPX 2078 close. At 10am, while the market continued its decline, Pending home sales were reported lower: -0.9% v +0.2%. At 10:30 the SPX hit 2069 and tried to rally. The bounce lasted for one half hour as the SPX hit 2074, and then headed back down. At 3:30 the SPX hit 2062, then bounced to close at 2063.
For the day the SPX/DOW lost 0.70%, and the NDX/NAZ lost 0.80%. Bonds lost 2 ticks, Crude dropped $1.15, Gold slid $8, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Chicago PMI at 9:45.
After yesterday’s gap up and go rally, when the market became quite overbought short term, today’s pullback fits. From last week’s SPX 2006 low, we have five waves up to SPX 2067 which we have temporarily labeled Minor 1. A pullback to SPX 2042, labeled Minor 2. And now a two wave rally SPX: 2082-2062? We would expect this pullback to find support soon, and then the rally to resume if we are in an uptrend. Keep in mind SPX 2044 still remains the up/down trend fulcrum point. Short term support is at SPX 2042 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum declined from yesterday’s quite overbought condition to oversold today. Best to your last day of trading in 2015!
MEDIUM TERM: still a positive bias for a potential uptrend
LONG TERM: bull market