SHORT TERM: higher early then decline, DOW -196
Overnight the Asian markets ended mixed. Europe opened higher and gained 0.3%. US index futures were lower overnight. At 8:30 Q2 GDP was reported higher: 1.4% v 1.1%, and weekly jobless claims rose: 254K v 252K. The market opened three points below yesterday’s SPX 2171 close, then rose to 2173 by 10am. At 10am pending home sales were reported lower: -2.4% v 1.3%, and FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20160929a.htm. Then the market declined to SPX 2163 just past 11am and rallied to 2170 by 12:30. Then some negative news broke on Deutsche Bank and the market sold off to SPX 2145 by 2pm. After that there was a rally to SPX 2161, then a decline to 2151 to end the day.
For the day the SPX/DOW lost 1.00%, and the NDX/NAZ lost 0.85%. Bonds added 3 ticks, Crude rose 60 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, then consumer sentiment at 10am.
The market opened slightly lower today, then hit SPX 2173. After a pullback the market started to rally, and then the DB news broke. The stock sold off and the market sold off with it. For the first time, since the SPX 2120 low and seven rallies, the SPX fully retraced one: 2152-2173-2145. Now it is quite clear, the entire advance off the SPX 2120 low is corrective. This suggests SPX 2120 was an A, and SPX 2180 was a B, with a C wave underway now. Would have taken this viewpoint earlier if it wasn’t for the ongoing uptrend in the NDX/NAZ indices. Cyclicals fighting the Tech advance. Short term support is now at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite oversold at today’s lows then bounced. Trade what’s in front of you!
MEDIUM TERM: potential uptrend looks corrective
LONG TERM: uptrend