SHORT TERM: gap down opening, DOW -167
Overnight the Asian markets lost 1.4%. Europe opened lower and lost 1.8%. US index futures were lower overnight, and the market gapped down to SPX 2154 at the open. The SPX had closed at 2165 last week. In the opening minutes the SPX hit 2149, then rallied to 2157 by 10:30. At 10am new home sales were reported lower: 609K v 654K. Then the market resumed its pullback. At noon FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20160926a.htm. Heading into the close the SPX hit 2145, then closed at 2146.
For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 0.90%. Bonds gained 11 ticks, Crude rose $1.20, Gold slipped $1, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Case-Shiller at 9am, consumer confidence at 10am, and a speech from FED vice chair Fischer at 11:15.
Today’s selling appears to have begun overnight in Asia. Then in Europe some non-supportive government comments were made regarding the troubled Deutsche Bank. The DAX was down sharply by time the US markets opened. When Germany closed the DAX had lost 2.2%, and the SPX was at 2148. For the rest of the day the SPX traded between 2145-2153. As a result of today’s decline we now have five overlapping rallies from the recent SPX 2120 low. Yes it looks corrective, and would confirm that with a further drop to SPX 2140 – which would completely retrace the most recent rally. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum is displaying a slight positive divergence at the close. Trade what is in front of you!
MEDIUM TERM: 80% uptrend probability being tested
LONG TERM: uptrend