SHORT TERM: gap down opening, DOW -249
Overnight the Asian markets lost 3.1%. Europe opened lower and lost 3.4%. US index futures were sharply lower overnight, but recovered some heading into the open. At 8:30 the CPI was reported lower: -0.1% v 0.0%, Housing starts were reported lower: 1149K v 1173K, and Building permits were reported lower: 1232K v 1289K. The market gapped down to SPX 1860 at the open and continued to decline. The SPX had closed at 1881 yesterday. The market continued to decline until 11am when the SPX hit 1825. Then after a brief rally to SPX 1837 by 11am, the market hit its low for the day at SPX 1812 by 12:30. After that it started to rally. At 1pm the SPX hit 1832, pulled back to 1820 by 1:30, then rose to 1876 by 3:30. After a pullback to SPX 1857, the market closed at 1859.
For the day the SPX/DOW lost 1.35%, and the NDX/NAZ lost 0.20%. Bonds gained 14 ticks, Crude dropped 90 cents, Gold rallied $14, and the USD was higher. Medium term support drops to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: the ECB meets, then weekly Jobless claims and the Philly FED at 8:30.
The market gapped down at the open today then worked its way down to SPX 1812 in early afternoon. Our potential five waves up for a C wave of a zigzag, from yesterday’s SPX 1865, was nullified at the opening. At today’s low the SPX hit 1812, which was in between the 1828 pivot and the SPX 1791 Fibonacci level noted over the weekend. The rally that followed from that low is the best rally since the Int. C wave began at SPX 2082. Also at the low there is a positive divergence on the daily charts, suggesting this 300 point downtrend may have just ended. A move into the mid-1880’s would add to this possibility. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum swung from quite oversold to nearly overbought during this afternoon’s rally. Volatile market, best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bear market