SHORT TERM: another gap down opening, DOW -258
Overnight the Asian markets ended mixed. Europe opened higher but lost 0.7%. US index futures were sharply lower overnight, and the market gapped down at the open to SPX 2144. The SPX had closed at 2159 yesterday. In the opening minutes the SPX hit 2139, bounced to 2146, then headed even lower. By 11:30 the SPX hit 2124, rallied to 2132 by 12:30, then hit 2120 by 1pm. After a rally to SPX 2136 by 1:30 the market headed down again. At 2pm the Budget deficit was reported larger: -$107.1B v -$64.4B. After a rally to SPX 2136 by 1:30 the market remained in a 2120-2136 range into the close, ending the day at 2127.
For the day the SPX/DOW lost 1.45%, and the NDX/NAZ lost 1.00%. Bonds dropped 13 ticks, Crude slid $1.40, Gold lost $9, and the USD was higher. Medium term support slips back to the 2116 and 2085 pivots, with resistance at the 2131 and 2177 pivots. Tomorrow: export/import prices at 8:30.
The market gapped down at the open for the third day in a row. This has not occurred since nearing the low of the August 2015 selloff. Which, btw, was substantially greater than the recent 75 point decline. While many market pundits were on holiday the SPX remained in a 1.5% trading range for eight weeks. Upon their return last week the market is now moving 1.5%+ in one day. Are they all day traders? After last Wednesday’s high at SPX 2188, which ended a diagonal triangle 5th wave, the market dropped straight down to 2119 at Monday’s open. Then we had yesterday’s sharp rally to the SPX to 2163, and now today the SPX hit 2120 at the low. This can be counted as three waves down: 2119-2163-2120 so far. Short term support is at the 2116 and 2085 pivots, with resistance at the 2131 and 2177 pivots. Short term momentum dropped to oversold during today’ decline. Trade what’s in front of you!
MEDIUM TERM: downtrend
LONG TERM: uptrend