SHORT TERM: afternoon decline, DOW -211
Overnight the Asian markets dropped 1.7%. Europe opened lower but gained 0.1%. US index futures were lower overnight. At 8:30 Q1 GDP was reported lower: +0.5% v +1.4%, and weekly Jobless claims were reported higher: 257K v 247K. The market opened seven points below yesterday’s SPX 2095 close, ticked down two more points to 2086, and then began to rally. By 11:30 the SPX hit 2099, and then started to pullback again. The pullback accelerated in the last two hours of trading, as the SPX hit 2072 just before a 2076 close.
For the day the SPX/DOW lost 1.05%, and the NDX/NAZ lost 1.20%. Bonds gained 9 ticks, Crude rose 30 cents, Gold rallied $22, and the USD was lower. Medium term support drops to the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: PCE prices, Personal income/spending at 8:30, then Consumer sentiment and the Chicago PMI at 10am.
Choppy market activity finally gets resolved to the downside in its sixth day. The market opened lower, hit SPX 2086, rallied to SPX 2099, and then traded to 2072 near the close. Thus far from last week’s SPX 2111 uptrend high the decline does look a bit choppy, but we can see a potentially larger three wave pattern: 2081-2099-2072 thus far. With SPX 2074 broken to the downside, the five waves up from SPX 2034-2111 is complete. Now the uptrend/downtrend range widens to either an uptrend continuation, by breaking through 2111, or a new downtrend, by breaking below SPX 2034. Short term support is at the 2070 and 2043 pivots, with resistance at the 2085 pivot and SPX 2104. Short term momentum dropped to quite oversold after the negative divergence. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: bear market rally