SHORT TERM: gap down opening, DOW -174
Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.8%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 267K v 276K. The market gapped down to SPX 2055 at the open and continued to decline. The SPX had closed at 2067 yesterday. Around 12:30 the SPX hit 2043 again, bounced to 2050 just past 1pm, but this time broke that support declining to 2034 by 3pm. At 3pm Consumer credit was reported higher: $17.3B v $10.5B. Then a rally into the close ended the day at SPX 2042.
For the day the SPX/DOW lost 1.10%, and the NDX/NAZ lost 1.50%. Bonds gained 18 ticks, Crude slipped 30 cents, Gold rallied $16, and the USD was higher. Medium term support drops to the 2019 and 1973 pivots, with resistance now at the 2043 and 2070 pivots. Tomorrow: Wholesale inventories at 10am.
The market gapped down at the open for the second time this week. This time, however, it broke through the support at the 2043 pivot, hit its lowest level in seven trading days, and then bounced into the close. We can now count three waves down from the SPX 2075 high: 2043-2067-2034 so far. To keep the momentum going to the downside the 2019 pivot would be the next support level that needs to be broken. After that there is a large gap for the next support at the 1973 pivot. Short term momentum ended the day rising toward neutral. Trade what’s in front of you, but invest on what you believe is ahead.
MEDIUM TERM: uptrend weakening
LONG TERM: bear market