SHORT TERM: pullback continues, DOW -37
Overnight the Asian markets lost 0.4%. Europe opened lower and lost 0.2%. US index futures were higher overnight, and the market opened one point above yesterday’s SPX 2182 close. Right after the opening minutes the market started to pullback. The pullback continued throughout the day with nothing more than 2-4 point bounces. At 2pm the Budget deficit was reported lower: -$112.8B v -$149.2B. At 2:30 the SPX hit 2172, bounced to 2177 by 3:30, then closed at 2175.
For the day the SPX/DOW lost 0.25%, and the NDX/NAZ lost 0.35%. Bonds gained 12 ticks, Crude dropped $1.30, Gold rose $6, and the USD was lower. Medium term support drops to the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims and export/import prices at 8:30.
Interesting juncture. The market opened slightly higher today then immediately resumed yesterday’s pullback. At the SPX 2172 low the market had declined 16 points from yesterday morning’s all time high at 2188. So far this is a normal pullback for a Minor wave during this uptrend. However, with negative divergences on the hourly/daily charts and a potential five Int. waves up in 4 of the 5 indices, this pullback could turn into a correction. The only index that has not made a new high during this last rally is the DOW. It suggests this pullback is only Minor wave 2 of Int. v. These two options were posted earlier on the SPX hourly chart. Time to choose which scenario you prefer, or just hedge longs and watch Crude which led the market lower today, and wait to see what unfolds. Short term support is the at 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum is displaying a slight positive divergence at today’s low. Trade what’s in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend