SHORT TERM: gap down opening then lower, DOW -101
Overnight the Asian markets gained 0.2%. Europe opened lower and lost 1.1%. US index futures were lower overnight, and at 8:30 weekly jobless claims were reported higher. The market gapped down at the open to SPX 2580, dropped to 2577 in the opening minutes, then rebounded to 2586 just before 10am. The market had closed at SPX 2594 yesterday. At 10am wholesale inventories were reported higher. The market then dropped to SPX 2581 by 10:30, bounced to 2587 by 11am, then tumbled to 2566 by 12:30. After that the market started to rally. The rally continued into the last hour of trading when the SPX hit 2586. Then it dipped to close at SPX 2585.
For the day the SPX/DOW lost 0.40%, and the NDX/NAZ lost 0.55%. Bonds slipped 2 ticks, Crude rose 25 cents, Gold rallied $5, and the USD was lower. Medium term support remains at the 2575 and 2525 pivots, with resistance at the 2594 and 2632 pivots. Tomorrow: consumer sentiment at 10am.
The market gapped down at the open today for the first time since last Monday. Overnight volatility in Japan and Senate/House Tax plan leaks fueled the decline. By 12:30 the SPX had hit 2566, last week’s low, and then rebounded. Quite a drop from Tuesday’s SPX 2597 all-time high. While there was several potential counts floating around heading into today, it appears all but two have been eliminated. Either Micro wave 5 just set up an irregular wave 2: 2588-(2566-2597-2566)-xxxx, and will move higher shortly. Or, Minute iii ended at SPX 2588, and everything since then has been past of Minute iv. Including the potential head and shoulders pattern: 2588-2597-2586 on the daily charts. We’re going to use the parameters set up by the market to decide. A breakout above SPX 2597 and Micro 5 extends, a breakdown below SPX 2566 and Minute iv continues. Short term support is at the 2575 pivot and SPX 2566, with resistance at the 2594 and 2632 pivots. Short term momentum put in a very slight positive divergence at today’s lows. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend