SHORT TERM: gap down opening, DOW -189
Overnight the Asian markets lost 0.8%. Europe opened lower and lost 1.4%. US index futures were generally lower overnight, and at 9am Case-Shiller was reported lower: +5.7% v +5.8%. The market gapped down at the open to SPX 1939 and continued lower. The SPX had closed at 1946 yesterday. At 10am Existing home sales were reported higher: 5.47M v 5.46M, and Consumer confidence was reported lower: 92.2 v 98.1. The market continued to decline until it hit SPX 1922 around 11:30. Then after a bounce to SPX 1929 just before noon it went into a trading range between those levels until the last hour of trading. Then the market broke to a slightly lower low at SPX 1919, rallied to 1927, then closed at 1921.
For the day the SPX/DOW lost 1.20%, and the NDX/NAZ lost 1.55%. Bonds gained 6 ticks, Crude dropped $1.55, Gold rallied $17, and the USD was higher. Medium term support drops to the 1901 and 1869 pivots, with resistance back to the 1929 and 1956 pivots. Tomorrow: New home sales at 10am.
Another day another gap opening. This time however to the downside. After yesterday’s short term negative divergence the market opened at SPX 1939, dropped to 1922, bounced a bit, then made a lower low at 1919. We continue to maintain the current count: Int. A 1931, Int. B 1902, and Int. C underway. There is a possibility, however, that yesterday’s SPX 1947 high ended Int. A and Int. B is now underway. If so, the 1901 pivot should again provide support. Will adjust the short term count, if needed, pending additional market activity. Either way the market should eventually work its way higher to complete this uptrend by next week. Short term support is now at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Short term momentum ended slightly oversold. Best to your trading this “gappy” market!
MEDIUM TERM: uptrend likely underway
LONG TERM: bear market