SHORT TERM: another gap opening, DOW +53
Last night FED vice chair Fischer gave a speech: http://www.federalreserve.gov/newsevents/speech/fischer20160223a.htm. Asian markets lost 1.1%. European markets opened lower and lost 2.1%. US index futures were lower overnight. The market gapped down at the open for the second day in a row. It opened at SPX 1903 and continued to fall. The SPX had closed at 1921 yesterday. At 10am New home sales were reported lower: 494K v 544K. Around 10:30 the SPX hit its low for the day at 1891, and then started to rally. The rally continued throughout the day, with seven to eight point pullbacks, closing the opening gap and hitting SPX 1932 at 3:30. After that the market dipped into the close to end the day at SPX 1930.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.90%. Bonds gained 2 ticks, Crude rose 40 cents, Gold added $4, and the USD was lower. Medium term support rises the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Tomorrow: weekly Jobless claims and Durable goods orders at 8:30, then FHFA housing at 9am.
The market gapped down at the open, for the twelfth gap opening in the past thirteen trading days. At the open we adjusted the count to display and Int. wave A high at Monday’s SPX 1947, with Int. B underway. This gives Int. A seven waves up from the SPX 1810 low: 1836-1822-1888-1875-1931-1902-1947. This pattern is known as a double zigzag. The selloff from that high was the largest since the rally began at SPX 1810: 1947-1891. At today’s low the market had retraced about 38.2% of the rally, and was extremely oversold short term. After that the market took off to the upside as another volatile day, great for day traders, was recorded. Barring two more gap down openings to end the week, Int. C should be underway. Since Int. A was 130+ points, and Int. B was 50+ points, (both Fibonacci numbers, excluding the zero), Int. C can be 50+, 80+, or even 130+ points from the 1891 low. Oddly enough these resistance levels are still right around the 1956, 1973 and 2019 pivot ranges. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum rose from extremely oversold to slightly overbought on this volatile day. Best to your trading!
MEDIUM TERM: uptrend likely underway
LONG TERM: bear market