SHORT TERM: gap up opening sold, DOW -4
Overnight the Asian markets gained 0.4%. Europe opened higher and gained 1.3%. US index futures were higher overnight, and the SPX gapped up to 2147 at then open. The SPX had closed at 2139 on Friday. At 10am the SPX hit 2154 and began to pullback. Also at 10am the NAHB was reported higher: 65 v 59. The pullback continued into the afternoon with small bounces along the way. At 1:30 the SPX hit 2136, completely retracing the gap up opening rally and turning a few points negative. The market then rallied to SPX 2146 by 3pm, only to pullback and end the day unchanged at 2139.
For the day the SPX/DOW ended flat, and the NDX/NAZ lost 0.30%. Bonds lost 1 tick, Crude rose 15 cents, Gold added $3, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: housing starts and building permits at 8:30.
The market gapped up at the open for the first time since early this month. That gap up opening was also sold off, but eventually led to slightly higher prices a few days later. The rally took the SPX to 2154, the highest level since a week ago Monday. Then the market closed the opening gap and turned negative, hitting SPX 2136. From Wednesday’s SPX 2120 low we can now count four overlapping waves: 2151-2131-2154-2136. This could be a nesting of waves, or more corrective activity. Important support remains at the 2131 pivot range. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite overbought during today’s rally then ended at neutral. Trade what is in front you!
MEDIUM TERM: uptrend underway?
LONG TERM: uptrend