SHORT TERM: higher open then pullback, DOW -21
Overnight the Asian markets lost 0.1%. Europe opened higher but lost 0.1%. US index futures were higher overnight and the market opened 3 points above yesterday’s SPX 2413 close. Right after the open the market started to pullback. At 9:45 the Chicago PMI was reported lower, and at 10am pending home sales were reported lower. At 10am the SPX hit 2404, and then rebounded to 2411 by 11am. For the next few hours the market stayed in a trading range between 2404-2411 until 2pm, when the FED released the beige book: https://www.federalreserve.gov/monetarypolicy/beigebook201705.htm. Then after hitting SPX 2405 just past 2pm, the market rallied to 2412 and closed there.
For the day the SPX/DOW lost 0.10%, and the NDX/NAZ lost 0.10%. Bonds gained 1 tick, Crude dropped $1.45, Gold rose $5, and the USD was lower. Medium term support remains at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Tomorrow: the ADP at 8:15; weekly jobless claims at 8:30; then ISM, construction spending and auto sales at 10am.
The market opened within 3 points of the all-time high today, AMZN and GOOG hit $1000, and then the market started to pullback. Profit taking trigger? At today’s low the SPX hit 2404, for a 15-point decline from the 2419 all-time high. And this is the first quantifiable pullback, on our shortest timeframe, since this rally began at SPX 2353. Pullbacks during the first rally of this uptrend, SPX 2329-2406, ranged from 14-22 points. The current 15-point pullback, thus far, fits right into this range. Should the market drop to the OEW 2385 pivot, then we will have a pattern that could be more significant than just a normal pullback. Whether it is a minor pullback or major pullback the market still appears to be heading to higher highs before this uptrend concludes. Should the SPX drop all the way back to 2353, however, then the uptrend probably topped at 2419. Until something more dramatic than a 14-22 point pullback occurs, the short term count remains unchanged. Short term support is at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Short term momentum dropped from a negative divergence to quite oversold at today’s lows, then bounced above neutral in the afternoon. Trade what’s in front of you!
MEDIUM TERM: uptrend
LONG TERM: uptrend