SHORT TERM: Int. wave iv pullback underway, DOW -91
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 1.4%. US index futures were lower overnight as well. At 8:30 personal income (+0.2% v +0.2%)/spending (+0.4% v +0.4%) were reported higher, and PCE prices were reported higher: +0.1% v +0.2%. The market opened five points below yesterday’s SPX 2171 close, bounced to 2170 in the opening minutes, then started to decline. At 11am the SPX hit 2151, bounced to 2156 by 11:30, and then headed even lower. At 1pm the SPX hit 2148, the low for the day, rallied to 2159 in the last hour of trading, then closed at 2157.
For the day the SPX/DOW lost 0.55%, and the NDX/NAZ lost 0.85%. Bonds dropped 10 ticks, Crude slid 40 cents, Gold rallied $11, and the USD was lower. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: the ADP index at 8:15, then ISM services at 10am.
The market opened lower today, bounced, and then broke below the SPX 2159 level confirming Intermediate wave iv was underway. Minor wave 5 of Int. iii was quite short, ending within the 2 point range of the 2180 level. Since Int. ii began on the first day of July, was a 2-day 35 point decline, and found support near the 2070 pivot with a positive divergence. We would expect Int. iv to have a similar decline, having started on the first day of August, and find support near the 2131 pivot with possibly a positive divergence as well. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum hit extremely oversold at today’s low then bounced. Trade what is in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend