SHORT TERM: market opens lower, DOW -84
Overnight the Asian markets lost 0.7%. Europe opened lower and lost 0.7% too. US index futures were lower overnight as well. At 8:30 the CPI was reported unchanged: 0.0% v 0.2%, housing starts were reported higher: 1211K v 1189K, and building permits were reported lower: 1152K v 1153K. At 9:15 industrial production was reported higher: 0.7% v 0.6%, and capacity utilization was reported higher: 75.9% v 75.4%. The market opened six points below yesterday’s SPX 2190 close, reached 2180 in the opening minutes, then bounced to 2185 by 11:30. After that the market drifted lower to end the day at the low, SPX 2178.
For the day the SPX/DOW lost 0.50%, and the NDX/NAZ lost 0.65%. Bonds lost 8 ticks, Crude rose 85 cents, Gold gained $7, and the USD was lower. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Today the Q3 GDP estimate was raised: 3.6% v 3.5%. Tomorrow: FOMC minutes at 2pm.
The market opened lower today, after yesterday’s new high at SPX 2194, and continued to decline to 2178 at the close. This activity was unexpected, as we thought SPX 2200 to 2212 would be next. We now have four overlapping waves from the Int. wave iv SPX 2148 low. This suggest possibly an ending diagonal triangle is forming for Int. wave v: 2188-2172-2194-2178-…. There are also a couple of other short term possibilities. But for now we will go with the diagonal scenario, suggesting an uptrend high around SPX 2200. Keep in mind, any drop below SPX 2148 suggests the uptrend could have already ended. Short term support is at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Short term momentum is displaying a positive divergence at todays lows. Trade what is in front of you!
MEDIUM TERM: uptrend weakening
LONG TERM: uptrend