SHORT TERM: higher open then pullback, DOW +46
Overnight the Asian markets ended mixed. Europe opened higher but lost 0.2%. US index futures were higher overnight, and at 8:30 retail sales were reported lower along with the CPI. The market opened 4-points above yesterday’s SPX 2440, then immediately started to pullback. At 10am business inventories were reported lower. The market pulled back to SPX 2435 by 11am, and then started to drift higher heading into the FED’s 2pm statement. The FED increased FED Funds 25 bps and released the following: https://www.federalreserve.gov/newsevents/pressreleases/monetary20170614c.htm, https://www.federalreserve.gov/newsevents/pressreleases/monetary20170614a.htm, https://www.federalreserve.gov/newsevents/pressreleases/monetary20170614b.htm. The market hit SPX 2443 just after the FED increased rates and then started to pullback again. Just past 3pm the SPX hit its low for the day at 2428. The bounced into the close to end the day at 2438.
For the day the SPX/DOW were mixed, and the NDX/NAZ lost 0.40%. Bonds gained 17 ticks, Crude dropped $1.75, Gold lost $7, and the USD was flat. Medium term support remains at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Tomorrow: jobless claims, the NY/Philly FED and export/import prices all at 8:30; then industrial production at 9:15 and the NAHB at 10am.
The market opened higher today, failed to reach the all-time high of SPX 2446 by 2-points, (but the futures did reach their high just before the open), and then traded lower for the rest of the day. The DOW made a new high, and the NDX/NAZ retraced more than 50% of its two day decline. Quite a mixed market at the moment. Should the NDX/NAZ break Monday’s lows, cannot see how the SPX/DOW will not follow lower. Should the NDX/NAZ remain in a trading range for a while, then the SPX/DOW might be able to move somewhat higher. Right now it looks like today offered a new high for the DOW, while the SPX might have had a small 5th wave failure by just 2-points. With the FED raising rates again, and a firm announcement/plan of a balance sheet reduction, Quantitative Deleveraging, probably starting in September, the market has sufficient reason to enter correction mode. Intermediate wave iii in the SPX may have ended today. Short term support is at the 2428 and 2411 pivots, with resistance at the 2444 and 2456 pivots. Short term momentum dropped from overbought to oversold and then ended at neutral. Trade what’s in front of you!
MEDIUM TERM: uptrend may have topped
LONG TERM: uptrend