SHORT TERM: gap down opening then rebound, DOW +22
Overnight the Asian markets lost 0.8%. Europe opened lower and lost 0.7%. US index futures were lower overnight. At 8:30 Retail sales were reported lower: -0.1% v +0.2%, the PPI was reported lower: -0.2% v +0.1%, and the NY FED was reported higher: +0.6 v -16.6. The market gapped down at the open to SPX 2010, and continued to decline until hitting 2005 at 10am. At 10am Business inventories were reported higher: +0.1% v +0.1%, and the NAHB was reported unchanged at 58. With the market hitting short term oversold it then started to rebound. The rebound continued throughout the day and in the last hour of trading the SPX hit 2016 and closed there.
For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.25%. Bonds lost 3 ticks, Crude dropped 75 cents, Gold added $1, and the USD was lower. Medium term support drops back to the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Tomorrow: the CPI, Housing starts and Building permits at 8:30, Industrial production at 9:15, then the FED ends its FOMC meeting at 2pm.
The market dropped at the open today, following through with yesterday’s short term negative divergence. After making a low at SPX 2005 in the first half hour the market rebounded for the rest of the day, as short term momentum rose back to above neutral. Typically during the beginning of a downtrend it doesn’t get much higher than this. Today’s pullback fell just short of making it a significant wave. Need to drop below today’s lows for that to occur now. Market appears to be hanging in limbo ahead of tomorrow’s often volatile FOMC statement. Short term support drops to the 1973 and 1956 pivots, with resistance a the 2019 pivot and SPX 2028. Best to your FOMC trading!
MEDIUM TERM: uptrend
LONG TERM: bear market