SHORT TERM: another gap down opening, DOW -110
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 0.9%. US index futures were lower overnight, and the market gapped down at the open to SPX 1989. The market had closed at SPX 2002 yesterday. After the open the market continued to chop its way lower until hitting SPX 1980 by 11am. After that it started to rally. The rally continued into the afternoon when the SPX hit 1994 around 1:30. Then the market reversed and headed lower. Heading into the close the SPX hit 1977, then bounced to close at 1979.
For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 1.05%. Bonds gained 20 ticks, Crude dropped $1.65, Gold slipped $6, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Tomorrow: Wholesale inventories at 10am.
The market gapped down at the open for the second day in a row. The last time it had two consecutive gap down openings was when the market was declining from SPX 1947-1891. With today’s early activity the market has now pulled back 32 points from Friday’s SPX 2009 uptrend high. Nothing unusual yet during this 200 point uptrend. We are, however, observing a short term signal that the uptrend may have topped. Still need a drop below SPX 1963 to add conviction to this possibility. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2009 and the 2019 pivot. Short term momentum touched oversold at today’s lows, bounced, then headed back down. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bear market