SHORT TERM: volatility continues, DOW +116
Overnight the Asian markets lost 1.5%. Europe opened higher and gained 1.9%. US index futures were lower, then higher overnight. At 8:30 weekly Jobless claims were reported higher: 293K v 284K, and the Philly FED was reported lower: -3.5 v -5.9. The market opened just one point above yesterday’s SPX 1859 close, rallied to 1868, then dropped to 1849 by 10am. The market then rallied to SPX 1880 just before 11am, dropped to 1867 by 11am, and rallied to 1890 around noon. After that the market dropped to SPX 1860 by 2:30, rallied to 1877 by 3pm, dipped to 1865 just after 3pm, rallied to 1878 just before the close, and dropped to 1869 to end the day. Choppy day.
For the day the SPX/DOW gained 0.60%, and the NDX/NAZ gained 0.10%. Bonds lost 8 ticks, Crude rallied $1.40, Gold added $1, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Existing home sales and Leading indicators at 10am.
The market broke its gap opening streak today, ending it at 13 days in a row. After a quiet opening the volatility began. After hitting a low of SPX 1849, the market rallied to 1890, dropped to 1860, and rallied to 1878 just before the close. From yesterday’s potential downtrend low at SPX 1812 the market has rallied in a series of corrective waves. Three up to SPX 1876, three down to 1849, three more up to 1890, down to 1860, and now on the rise again. Normal bear market uptrends retrace anywhere from 38.2% to 61.8% of the previous downtrend (i.e. 2116-1812). So far the retracement has been 25.6%. Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum hit overbought during today’s rally and ended the day at neutral. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bear market