SHORT TERM: pull back continues, DOW -27
Overnight the Asian markets lost 0.7%. Europe opened lower and lost 0.7% as well. US index futures were lower overnight, and the market opened 7 points below Friday’s SPX 2092 close. At 10am New home sales were reported lower: 511K v 512K. The market continued to decline until around 11am when the SPX hit 2078. Then the market rallied to SPX 2087 just past 1pm, pulled back to 2082 around 2:30, then close at 2088.
For the day the SPX/DOW were -0.15%, and the NDX/NAZ were -0.15%. Bonds lost 6 ticks, Crude dropped 85 cents, Gold rose $3, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: Durable goods at 8:30, Case-Shiller at 9am, and Consumer confidence at 10am.
The market opened lower today, dropped to SPX 2078 taking out Friday’s low, then rallied to 2088 close out the day. We now see three waves down from the SPX 2111 high: 2081-2093-2078 so far. None of the three levels, noted in the weekend update, have been breeched yet: 2111, 2074 and 2034. Until this occurs the market is sort of in consolidation mode ahead of the FED. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2104 and SPX 2116. Short term momentum made a positive divergence at this morning’s low. Trade what’s in front of you, invest in what you believe is ahead.
MEDIUM TERM: uptrend
LONG TERM: bear market rally