SHORT TERM: another volatile FOMC day, DOW -3
Overnight the Asian markets lost 0.6%. Europe opened lower but gained 0.3%. US index futures were choppy overnight, and the market opened six points below yesterday’s SPX 2047 close. In the opening minutes the SPX ticked down to 2040, then rallied to 2055 by 10:30. After a pullback to SPX 2048 by 11am, the market rallied to 2061 just ahead of the FOMC: http://www.federalreserve.gov/newsevents/press/monetary/20160518a.htm. The market then dropped sharply to SPX 2034 by 2:30. Then it rallied to SPX 2049 by 3pm, pulled back to 2039 by 3:30, then ended the day at 2048.
For the day the SPX/DOW were mixed, and the NDX/NAZ were +0.40%. Bonds lost 29 ticks, Crude slipped 65 cents, Gold dropped $21, and the USD was higher. Medium term support remains at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: weekly Jobless claims and the Philly FED at 8:30, then Leading indicators at 10am.
The market opened lower today, immediately reversed nearly reaching yesterday’s highs, then reversed again to the downside, after the FOMC minutes, to take out today’s low. Quite a roller-coaster ride! In the meantime from the recent SPX 2085 high we have three down to 2043, a rally to 2072, and now three more down to 2034. Quite choppy. But that has been the characteristic of the downtrends of late. With the break below SPX 2039 today, downward selling pressure is now underway. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum dropped from nearly overbought to barely oversold, where it ended the day. Trade what’s in front of you!
MEDIUM TERM: downtrend probable
LONG TERM: bear market