SHORT TERM: another gap up opening, DOW +63
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 0.6%. US index futures ignored all that and were higher overnight. At 8:30 personal income/spending was reported higher, and the CPI was higher too. The market gapped up at the open to SPX 2430, ticked up to 2431 and then began to pullback. The SPX had closed at 2420 yesterday. At 9:45 the Chicago PMI was reported higher, and at 10am consumer sentiment was reported higher. By 10:30 the market had pulled back to SPX 2421, and then started to work its way higher. Heading into the close the SPX hit 2433, then pulled back to end the week at 2423.
For the day the SPX/DOW gained 0.20%, and the NDX/NAZ lost 0.10%. Bonds lost 10 ticks, Crude rallied $1.25, Gold slid $3, and the USD was higher. Medium term support remains at the 2411 and 2385 pivots, with resistance at the 2428 and 2444 pivots. Today the Q2 GDP estimate was lowered to 2.7%, and the WLEI was lower too.
The market gapped up at the open for the third day this week. Oddly enough, despite the higher opens the market actually lost ground for the week. Had to go back to January 2016, which was during a correction, to find a similar occurrence. The market has now rebounded 27 points after yesterday’s steep 37 point decline to SPX 2406. This is somewhat similar to Wednesday’s gap up rally of 24 points: 2419-2443. After many weeks of quiet markets, volatility is picking up. This also occurs during corrections. While waiting for this downtrend to get confirmed we have projected some downside targets in the weekend update. Best to your weekend!
MEDIUM TERM: uptrend topped?
LONG TERM: uptrend