SHORT TERM: decline continues, DOW -57
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 2.3%. US index futures were lower overnight as well. At 8:30 Personal income +0.4% v +0.2%/spending +0.1% v +0.1% were reported higher and PCE prices were reported higher: +0.1% v+0.1%. The market opened five points below yesterday’s SPX 2076 close and continued to decline. At 10am Consumer sentiment was reported lower: 89.0 v 89.7, and the Chicago PMI was reported lower: 50.4 v 53.6. The market hit SPX 2060 at 10am, rallied to 2069 by 10:30, then headed even lower. After hitting SPX 2053 at 11:30, the market rallied to 2063, then declined to 2052 just past 2pm. After that the market rallied to SPX 2069 before ending the day/week/month at 2065.
For the day the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.55%. Bonds gained 2 ticks, Crude slipped 5 cents, Gold rallied $24, and the USD was lower. Medium term support drops to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 54.5% v 53.5%, and the initial Q2 GDP estimate was reported at +1.8%.
The market opened lower for the third day in a row. But unlike the past two days when it rallied shortly after the open, it continued to declined for most of the day until the last two hours. It is possible the current central bank QE holding pattern has taken the tail wind out of this uptrend. Also, the Nasdaq has now declined for seven days in a row, and is very close to confirmed a downtrend. Last weekend we mentioned three important levels for this week: 2111, 2074 and 2034. The market only managed to hit SPX 2100 on Wednesday before taking out 2074 on Thursday. More on this and others in the weekend update. Best to your weekend!
MEDIUM TERM: uptrend weakening
LONG TERM: bear market