SHORT TERM: gap up opening again, DOW +228
Overnight the Asian markets lost 1.2%. Europe opened lower and lost 1.4%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported higher: 284K v 277K, and Export (-1.0% v -0.6%)/Import (-0.4% v -0.2%) prices were reported lower. The market gapped up at the open to SPX 1898 and immediately began to pullback. At 10am the SPX hit 1879, a new low for the downtrend, and then started to rally. Just before 11am the SPX hit 1918, pulled back to 1902 by 11:30, and then headed even higher. Just past 3pm the SPX hit 1934, pulled back to 1919, and then closed at 1922.
For the day the SPX/DOW gained 1.55%, and the NDX/NAZ gained 2.05%. Bonds lost 6 ticks, Crude rose 65 cents, Gold dropped $17, and the USD was higher. Medium term support rises back to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: Retail sales, the PPI and NY FED at 8:30; Industrial production at 9:15; and Consumer sentiment and Business inventories at 10am.
The market gapped up at the open for the fifth day in a row. One would think the market would be up 50+ points for the week with all these gap up openings, but it is unchanged. After the opening the market sold off to SPX 1879 and then rallied into the last hour of the day. Today’s rally is the best one since the market started its decline from SPX 2082. Thus far it is four waves: 1918-1902-1934-1919. If the market has not entered a bear market yet, there are two possible short term scenarios. 1. Major 2 just ended and the market starts impulsing. 2. The market retests todays lows and then starts impulsing. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum touched overbought at today’s highs and then turned lower. Best to your trading options expiration Friday!
MEDIUM TERM: downtrend
LONG TERM: bull/bear inflection point