SHORT TERM: slightly higher open then decline, DOW -111
Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.2%. US index futures were slightly higher overnight, and the market opened two points above yesterday’s SPX 2269 close. Right after the open the market started to pullback. At 10am pending home sales were reported lower: -2.5% v +0.1%. The pullback continued into the afternoon, with just small 3 point bounces along the way, until the SPX hit 2249. Then a slight nudge up into the close ended the day at SPX 2250.
For the day the SPX/DOW lost 0.70%, and the NDX/NAZ lost 0.85%. Bonds gained 13 ticks, Crude was flat, Gold added $3, and the USD was higher. Medium term support remains at the 2212 and 2177 pivots, with resistance at the 2270 and 2286 pivots. Tomorrow: weekly jobless claims and the trade deficit at 8:30.
The market opened slightly higher today, then immediately reversed and headed lower. The pullback from today’s SPX 2271 high was quite steady to the downside. Yesterday we had noted the larger waves since the FED FOMC day SPX 2248 low. Today the two most recent lows, 2256 and 2254, were both exceeded to the downside. This suggests the market has been in a complex flat, or complex zigzag, since the SPX 2278 uptrend high, with three significant waves: 2248-2274-2249 thus far. If a complex flat this pullback should bottom around SPX 2248. If a complex zigzag then there are three potential areas SPX: 2243, 2233 and 2221. For now we continue to count the SPX 2278 uptrend high as wave 1, and this pullback wave 2, of Minute iii. However, we can no longer rule out that this pullback might be Minute wave iv. Short term support is at SPX 2243 and SPX 2248 with resistance at the 2270 and 2286 pivots. Short term momentum ended the day extremely oversold. Trade what is in front you!
MEDIUM TERM: uptrend
LONG TERM: uptrend