SHORT TERM: consolidation day, DOW -7
Overnight the Asian markets lost 1.4%. Europe opened lower and lost 0.5%. US index futures were relative flat overnight, and at 9am the FHFA was reported unchanged. The market opened 4 points below yesterday’s SPX 2344 close, bounced to 2345 in the opening minutes, then declined to 2336 by 10:30. At 10am existing home sales were reported lower: 5.48M v 5.69M. Then the market rallied to SPX 2351 by 11:30, pulled back to 2341 by 1pm, rallied to 2352 by 3:30, then closed at 2348.
For the day the SPX/DOW were mixed, and the NDX/NAZ gained 0.55%. Bonds rose 7 ticks, Crude slipped 10 cents, Gold gained $3, and the USD was lower. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow: weekly jobless claims at 8:30, a speech from FED chair Yellen at 8:45, then new home sales at 10am.
The market opened lower today, bounced, then hit the OEW 2336 pivot. After that it rallied 15 points, for its best advance since this decline from SPX 2390 began a week ago. The total decline from the March 1st all-time high at SPX 2401 has now reached 65 points. This is by far the largest pullback since this uptrend began in early-November. It is also the longest pullback in time as well. Looking at the SPX hourly chart, Nano wave ii only took 3-days, and this pullback is now 15-days. This appears to be quite out of balance. Micro wave 2, however, took 10-days, and this appears more in line with what has recently occurred. Also it fits the ongoing DOW hourly count as well. Will continue to keep both counts active, but now lean toward a Micro 4 underway instead of Nano iv. After the SPX hit 2401 and started to pullback, we anticipated some choppy activity going forward as a lot of smaller 5th waves had to unfold. But nothing like this type of decline. Should the market fail to rally from here, and then break the 2321 pivot range (2314), we would have to consider a correction is underway. Short term support is at the 2336 and 2321 pivots, with resistance in the mid-2350’s and the 2385 pivot. Short term momentum displayed a positive divergence at today’s low. Trade what’s in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend