SHORT TERM: higher open then pullback, DOW -9
Overnight the Asian markets gained 0.1%. Europe opened higher and gained 0.3%. US index futures were higher overnight, and at 8:30 housing starts (1090K v 1323K) and building permits (1201K v 1229K) were reported lower. The market opened 6 points above yesterday’s SPX 2262 close, then immediately began to pullback on this options expiration Friday. The pullback was choppy with the SPX hitting 2257 by 11:30, bouncing to 2264 by noon, and then hitting 2254 in the last hour of trading. Then the market bounced to end the week at SPX 2258.
For the day the SPX/DOW lost 0.10%, and the NDX/NAZ lost 0.35%. Bonds slipped 4 ticks, Crude rose $1.05, Gold rallied $7, and the USD was lower. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Today the WLEI was reported higher: 61.0% v 59.7%, and the Q4 GDP estimate remained unchanged at 2.6%.
After Tuesday’s uptrend high at SPX 2278 the market sold off on Wednesday when the FED announced its first rate hike in one year. The low on Wednesday was SPX 2248. Since then the market has bounced around in a choppy pattern: 2265-2250-2272-2254. After a nearly 200-point rally this pullback looks like a normal resetting of overbought conditions during an uptrend. Best to your pre-holiday weekend!
MEDIUM TERM: uptrend
LONG TERM: uptrend