SHORT TERM: the FED gives the market a pulse, DOW -53
Overnight the Asian markets lost 0.3%. Europe opened lower but gained 0.6%. US index futures were higher overnight, and at 8:30 the Q2 GDP estimate was lowered: 1.1% v 1.2%. The market gapped up at the open to SPX 2179, rose to 2182, and then pulled back to 2173 right after FED chair Yellen’s Jackson Hole speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20160826a.htm. The market then rallied to SPX 2188 by 10:30. Also at 10am consumer sentiment was reported lower: 89.8 v 90.4. Right after the high of the day the market started to decline. The decline continued until 2:30 when the SPX hit 2160. Then the market rallied into the close to end the week at SPX 2169.
For the day the SPX/DOW lost 0.20%, and the NDX/NAZ gained 0.15%. Bonds lost 19 ticks, Crude was flat, Gold slipped $2, and the USD was higher. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Yesterday: the Q3 GDP estimate was lowered to 3.4% v 3.6%.
The FED speaks and the market comes alive. After a gap up opening and rally to SPX 2188, (post JH speech), the market broke through the 2169-2194 trading range to the downside. After three weeks of a 25 point trading range, the market ranged 28 points in just one day. Now maybe we can get back to the business of a trending market. Best to your weekend!
MEDIUM TERM: downtrend may be underway
LONG TERM: uptrend