SHORT TERM: gap down opening, DOW -140
Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and the market gapped down to SPX 2070 at the open. The SPX had closed at 2081 yesterday. The market continued to decline until about 11:30, when the SPX hit 2055. Then it rallied back to SPX 2069 by 2pm before heading back down again. In the last hour of trading the SPX hit 2059 by 3:30, then bounced to close at 2063.
For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 1.00%. Bonds gained 19 ticks, Crude lost $1.10, Gold slipped $3, and the USD was higher. Medium term support drops back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the ADP at 8:15, Trade deficit at 8:30, then ISM services and Factory orders at 10am.
The market gapped down at the open for the first time since early April. The decline came within three points of Friday’s SPX 2052 low before the market rebounded. The rebound fell one point shy of the SPX 2070 gap down opening level. This kind of action did not usually occur during the two month uptrend. As noted in the weekend update, the NDX/NAZ are currently probably the least noisiest indices due to their limited exposure to energy and commodities. They are both suggesting a general market downtrend is underway. As a result we are posting a tentative green Major wave B label at the SPX 2111 high. Short term support is back to the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum hit oversold during today’s initial decline, bounced to neutral during the rally, and ended the day just below neutral. Trade what’s in front of you!
MEDIUM TERM: downtrend may be underway
LONG TERM: bear market