SHORT TERM: gap down opening, DOW -109
Overnight the Asian markets lost 0.9%. Europe opened lower and lost 1.3%. US index futures were lower overnight, and the market gapped down to SPX 2092 at the open. It had closed at SPX 2103 on Friday. At 10am Factory orders were reported lower: -1.0% v +1.9%, as the market continued to decline. Just before 11am the SPX hit 2083, rallied to 2090 by 11:30, then hit 2081 at 2pm. After a bounce to SPX 2087 by 2:30, the market hit 2081 again and started to rally. This market loves double bottoms. At 3:30 the SPX hit 2091, then dipped to close at 2089.
For the day the SPX/DOW lost 0.65%, and the NDX/NAZ lost 0.70%. Bonds gained 24 ticks, hitting a record low in the 10YR yield and a seventy year low in the 30YR. Crude lost $2.20, Gold rose $10, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: Trade deficit at 8:30, a speech from FED governor Tarullo at 9am, ISM services at 10am, then the FOMC minutes at 2pm.
The market gapped down at the open for the first time since the beginning of last week. Then the market put in a double bottom by 3pm and rallied into the close. Today the market also put in a double bottom by 3pm and rallied into the close. We can now count four waves, with a fifth possibly underway, from last Monday’s SPX 1992 low: 2027-2016-2109-2081-2091 so far. An impulsive advance if it hits 2109+ or corrective if not. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2111 and SPX 2121. Short term momentum hit oversold today after last week’s extreme overbought condition. Best to your trading!
MEDIUM TERM: uptrend probably underway
LONG TERM: neutral