SHORT TERM: another gap down opening, DOW -261
Overnight the Asian markets gained 0.8% – mostly Japan. Europe opened lower and lost 2.9%. US index futures were lower overnight, and at 8:30 the Trade deficit was reported higher: -$60.6B v -$57.5B. The market gapped down at the open to SPX 2017 and continued to decline. The market had closed at SPX 2037 on Friday. After Europe closed the market found some support at SPX 1992 at 11am, and tried to rally. By 1:30 the SPX had hit 2006. Then after a pullback to SPX 1992 again the market hit 2004, just before a 2001 close.
For the day the SPX/DOW lost 1.65%, and the NDX/NAZ lost 2.20%. Bonds gained 30 ticks, Crude dropped 90 cents, Gold rose $7, and the USD rallied. Medium term support drops to the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Tomorrow: Q1 GDP final at 8:30, Case-Shiller at 9am, Consumer confidence at 10am, and a speech from FED governor Powell in the evening.
The market gapped down at the open, immediately lost the 2019 pivot, and headed lower. At today’s low the SPX had dropped nearly 6% in just two days. Considering Germany and France have dropped over 10% in two days it is not too surprising. Since this market is moving quite fast we are tracking several small swings from the recent SPX 2113 high: 2055-2073-2033-2049-1992-2006-1992-xxxx. It does not look like five waves yet, but the third wave in this series does look subdivided: 2033-2049-1992-2006-1992. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2043 pivots. Short term momentum hit extremely oversold at the lows, then put in a positive divergence on the retest. Trade what is in front of you!
MEDIUM TERM: downtrend
LONG TERM: neutral