SHORT TERM: choppy FOMC day, DOW +22
Overnight the Asian markets were mixed. Europe opened lower and lost 0.9%. US index futures were lower overnight, and the market opened 2 points below yesterday’s SPX 2178 close. The market continued to pullback until 11:30 when the SPX hit 2169. Then ahead of the FOMC minutes the market started to move higher. At 1:30 the market hit SPX 2179. At 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20160817a.htm. Right after the release the market dropped to SPX 2172, and then started to rally. In the last hour of trading the SPX hit 2183, then closed at 2182.
For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.10%. Bonds gained 5 ticks, Crude rose 30 cents, Gold was flat, and the USD was lower. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Tomorrow: weekly jobless claims and the Philly FED at 8:30, then leading indicators at 10am.
Today’s continuation of yesterday’s decline eliminated the potential Int. v diagonal scenario quite early when the SPX hit 2172 in the opening minutes. At that time we posted an A labeling suggesting the uptrend may have topped at SPX 2194. We have also posted a less likely Minor 1 with an irregular Minor 2 scenario labeling as well. We were expecting this fifth wave up from SPX 2148 to be the shortest, as the 3rd wave was shorter than the 1st wave. Although not this short. With the characteristics of the uptrend changing, and negative divergences on the daily charts, it would appear a downtrend may be beginning. Short term support is at the 2177 and 2131 pivots, with resistance at the 2212 and 2252 pivots. Short term momentum bounced from extremely oversold to nearly overbought during the rally. Trade what is in front of you!
MEDIUM TERM: uptrend may have topped
LONG TERM: uptrend