SHORT TERM: quiet open then selloff, DOW -181
Overnight the Asian markets gained 0.9%. Europe opened higher but lost 0.2%. US index futures were choppy overnight. At 8:30 the CPI was reported higher: +0.4% v +0.1%, Building permits were higher: 1116K v 1086K, and Housing starts were higher: 1172K v 1089K. Then at 9:15 Industrial production was reported higher: +0.7% v -0.6%. The market opened four points below yesterday’s SPX 2067 close, then declined to 2057 by 10:30. After a rally back to SPX 2063 by 12:30 the market headed even lower. At 3:30 the market hit SPX 2041, then bounced to end the day at 2047.
For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 1.30%. Bonds lost 5 ticks, Crude rose 80 cents, Gold added $3, and the USD was flat. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Today the Atlanta FED lowered the Q2 GDP estimate: +2.5% v +2.8%. Tomorrow: FOMC minutes at 2pm.
The market opened lower today, dipped to SPX 2056, rallied back to the opening level, then sold off to Friday’s lows. Looks like Monday’s rally was a one day wonder. Still a few possible short term counts from the recent SPX 2085 high: three waves down to SPX 2043, one wave up to SPX 2072, and now another wave down to SPX 2041. It appears overnight action should determine whether or not the market rallies back to the 2070/2085 pivots, or breaks the current downtrend low at SPX 2039. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum dropped from quite overbought yesterday to quite oversold today. Trade what is in front of you!
MEDIUM TERM: downtrend probable
LONG TERM: bear market