SHORT TERM: another gap up opening sold, DOW +10
Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.1%. US index futures were higher overnight. At 8:30 building permits were reported lower: 1139K v 1152K, and housing starts were reported lower: 1142M v 1211M. The market gapped up at the open to SPX 2148, then ticked up to 2151 by 10am. The SPX had closed at 2139 yesterday. Then just like yesterday the market started to pullback after the first half hour of trading. At 1pm the SPX had closed the opening gap when going unchanged at 2139. Then after a rally to SPX 2146 by 3pm the market declined to close at 2140.
For the day the SPX/DOW gained 0.05%, and the NDX/NAZ gained 0.15%. Bonds rose 2 ticks, Crude gained 25 cents, Gold added $1, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: BOJ, then the FOMC at 2pm.
The market gapped up at the open like Monday, rallied to 10am like Monday, sold off to close the gap by early afternoon like Monday, bounced to 3pm like Monday, then closed almost unchanged again. We now can count six overlapping waves from the recent SPX 2120 low. This action does not look impulsive, it looks corrective and another leg down may be required to end this downtrend. Short term support is at the 2131 and 2116 pivots, with resistance at SPX 2151/2154 and the 2177 pivot. Short term momentum remained around neutral for most of the day. Trade what is in front of you during the normally volatile FOMC day!
MEDIUM TERM: downtrend still underway?
LONG TERM: uptrend