SHORT TERM: gap down opening then rebound, DOW -13
Overnight the Asian markets lost 2.2%. Europe opened higher but lost 1.2%. US index futures were lower overnight and the market gapped down to SPX 1837 at the open. The market had closed at SPX 1853 yesterday. In the opening minutes the market ticked down to SPX 1835, then began to rally. At 10am Wholesale inventories were reported lower: -0.1% v -0.3%. The rally continued until just past 10am when the SPX hit 1862. Then the market headed back down again. At 11am the SPX hit 1840, bounced to 1857 by 11:30, then hit the low again at 1835 by 1:30. After that another rally was underway. This rally made a new high for the day at SPX 1868 by 3pm. Then again the market pulled back. Just before the close the SPX hit 1850, then bounced to close at 1852.
For the day the SPX/DOW were -0.05%, and the NDX/NAZ were -0.35%. Bonds slipped 1 tick, Crude lost $1.15, Gold dipped $2, and the USD continued lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: FED chair Yellen testifies before Congress at 10am, then the Budget deficit at 2pm.
Another volatile day. The market opened with a gap down (1835), quickly reversed to turn positive on the day (1862), sold off again to retest the lows (1835), then rallied to break through the highs of the day (1868). Pivot (1828 ad 1869) ping pong? This afternoon’s action looked similar to yesterday afternoon’s action: low of the day, then ramp up 30+ SPX points. Yesterday we updated the SPX daily chart with a potential, unfinished, five Intermediate waves down for a Major A downtrend. The hourly chart we have left unchanged since the SPX has not broken the downtrends range SPX: 1812-2116. Under the daily count, today’s action would be considered part of a Minor wave 4 of Int. v. Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum nearly hit overbought during this afternoon’s rally. FED chair Yellen testifies before an economically challenged Congress tomorrow in an election year. Sets up to be quite a circus. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bear market