SHORT TERM: lower open then rally, DOW +56
Overnight the Asian markets lost 1.0%. Europe opened lower and lost 0.6%. US index futures bounced around overnight. At 8:30 weekly jobless claims were reported lower: 232k v 236k, and the Philly FED was reported higher: 38.8 v 22.0. The market opened 4 points below yesterday’s SPX 2357 close, and then started to rally. At 10am leading indicators were reported higher: 0.3% v 0.4%. Around 10:30 the SPX hit 2369. Then the market pulled back to nearly unchanged by noon. Another rally followed, this time to SPX 2376 by 2:30, then the market pulled back to close at 2366.
For the day the SPX/DOW gained 0.30%, and the NDX/NAZ gained 0.75%. Bonds lost 4 ticks, Crude rose 20 cents, Gold dropped $10, and the USD was higher. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow is options expiration.
The market opened at SPX 2353, then immediately rallied 16 points in one hour to 2369. After a pullback to SPX 2360 by 1:30, the market rallied 16 points again in one hour to 2376. A three-wave counter rally, or is the market stabilizing to resume the uptrend. Taking the extreme low of the recent downtrend (SPX 2322), the market has already retraced about 61.8% of the advance to SPX 2406 at today’s SPX 2353 low. A drop below today’s low would be a negative, and a loss of the 2336 pivot range would likely confirm a downtrend. A rally above today’s high would be a positive, and clearing the 2385 pivot range would likely resume the uptrend. Today’s SPX 2353-2376 looks like a key range day. Short term support is at SPX 2353 and the 2336 pivot, with resistance at SPX 2376 and the 2385 pivot. Short term momentum rose off of yesterday’s positive divergence to just past neutral. Trade what’s in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend