SHORT TERM: gap down opening to end year, DOW -179
Overnight the Asian markets gained 0.2%. Europe opened lower and lost 0.5%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 287K v 267K. The market gapped down to SPX 2052 at the open and continued to decline. The SPX had closed at 2063 yesterday. At 9:45 the Chicago PMI was reported lower: 42.9 v 48.7. The decline continued until the SPX hit 2046 at 10:30, then the market started to rally. The rally continued until just before 1pm when the SPX closed the opening gap at 2063. Then the market headed down again in this roller coaster session. Heading into the close the SPX hit 2044 and closed there.
For the day the SPX/DOW lost 1.0%, and the NDX/NAZ lost 1.2%. Bonds gained 10 ticks, Crude rose 40 cents, Gold was flat, 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 lower: 49.1% v 49.4%, and GDPn remains unchanged at +1.3%.
The market gapped down at the open for the second day this week. It continued yesterday’s pullback, from Tuesday’s SPX 2082 high, until it hit 2046 in the first hour of trading. Then the market rallied back to unchanged at SPX 2063 to close the gap before heading lower again. During the initial decline we noted the SPX nearly totally retraced this week’s rally from 2044-2082. This suggested, and we updated the hourly count, that the rally from the absolute low of SPX 2005 on 12/18 might have been the beginning of the rally to SPX 2082. This would produce a potential Minor 1 count: 2023-2006-2067-2044-2082. And Minor wave 2 is currently underway. Either way, the SPX 2044 level still looks like an important level for this potential uptrend. Will take a better look for the weekend update. Happy New Year everyone and best to your life/happiness/wealth in 2016. And don’t forget to share!
MEDIUM TERM: up/down trend returns to inflection point
LONG TERM: bull market