SHORT TERM: gap down opening then lower, DOW -234
Over the extended weekend the Asian markets lost 0.8%, and Europe lost 0.5%. US index futures were lower Sunday night and Monday night, and heading into the open. The market gapped down at the open to SPX 2469, dipped to 2466, and then rebounded. The SPX had closed at 2477 on Friday. At 10am factory orders were reported lower. Around 10:30 the SPX hit 2472 and then resumed its decline. At 1pm the SPX had dropped to 2447, then started to rebound. At 3:30 the SPX hit 2459, then ticked down to close at 2458.
For the day the SPX/DOW lost 0.90%, and the NDX/NAZ lost 0.95%. Bonds gained 24 ticks, Crude rose $1.30, Gold rallied $14, and the USD was lower. Medium term support remains at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Tomorrow: the trade deficit at 8:30, ISM services at 10m, then the Beige book at 2pm.
Last Tuesday the market gapped down on a N.K. related news event. Then right after the open the market rallied 52-points over the next 3-days, with only two 6-point pullbacks along the way. Today, another Tuesday, another N.K. related news event, the market gaps down at the open again, and this time it tanks. With market pundits coming back from summer holiday, Congress back in session, and N.K. ratcheting up the threats, it would appear the dull days of summer are gone. From Friday’s SPX 2480 high, the market has now dropped 33-points in just one trading day (2480-2447). The short-term wave pattern from SPX 2417 has now turned choppy: 2455-2428-2480-2447. Nevertheless, it can still go either way: corrective/impulsive. The originally anticipated correction has been on again – off again for weeks. Eventually this will get resolved. Short term support is at the 2456 and 2444 pivots, with resistance at the 2479 and 2525 pivots. Short term momentum hit extremely oversold at the low. Best to your trading!
MEDIUM TERM: inflection point remains
LONG TERM: uptrend