SHORT TERM: gap down opening then rebound, DOW +93
Overnight the Asian markets lost 2.0%. Europe opened lower and lost 0.5%. US index futures were lower overnight as well. At 8:30 the CPI was reported higher: +0.2% v +0.4%, the Philly FED was reported higher: 4.7 v -1.8, and weekly jobless claims were reported higher: 277K v 264K. The market gapped down at the open to SPX 2062, and continued to decline until hitting SPX 2050 by 10:30. The market had closed at SPX 2072 yesterday. At 10am the NAHB was reported higher: 60 v 58. As Europe began to close it rallied, and the US market rallied as well. The rally continued into the afternoon, with two pullbacks of 6 and 7 points, and hit SPX 2080 by 3:30. Then a dip at the close ended the day at SPX 2078.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.25%. Bonds gained 2 ticks, Crude dropped $2.00, Gold slid $16, and the USD was higher. Medium term support remains at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow is options expiration, building permits and housing starts will be reported at 8:30.
The market gapped down at the open today for the first time since last Friday. After opening under Tuesday’s double bottom support at SPX 2064 the market hit a low of 2050. After that the SPX followed Europe higher into its close, then continued higher still. Asia and Europe appear to have been driving the US market for the past week. While the decline from SPX 2121 can be counted as five waves, it can also be counted as three larger waves. Thus the impulsive/corrective pattern is inconclusive. Despite this week’s gyrations the market remains in the neutral SPX 2026 – 2121 range. A break either way should be the tell. Short term support is at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots. Short term momentum rose to near overbought after another positive divergence. Best to your trading options expiration!
MEDIUM TERM: uptrend under pressure
LONG TERM: neutral