SHORT TERM: flat open, bounce, then decline, DOW -109
Overnight the Asian markets lost 0.5%. Europe opened lower and lost 0.2%. US index futures were relatively flat overnight, and at 8:30 the trade deficit was reported larger. The market opened one point below yesterday’s SPX 2639 close. Then rallied to SPX 2649 just past 11am. At 10am ISM manufacturing was reported lower. After that the market resumed yesterday’s pullback. In the last hour of trading the SPX hit 2628, then bounced to 2630 to end the day.
For the day the SPX/DOW lost 0.40%, and the NDX/NAZ were mixed. Bonds gained 4 ticks, Crude added 20 cents, Gold lost $9, and the USD was higher. Medium term support drops to the 2594 and 2575 pivots, with resistance at the 2632 and 2646 pivots. Tomorrow: the ADP index at 8:15.
The market opened flat today, tried to rally, then rolled over heading lower, led by the DOW. Yesterday, as noted, the DOW resisted the decline. Today it led. We still count five waves up from Minute iv at SPX 2557: 2590-2578-2658-2606-2665. And now this 37-point decline. With this uptrend ongoing since April, we have seen these types of declines before, that ended up being just pullbacks. This one feels a bit different as the market is coming off extremely overbought levels, and three of the four FANG stocks are already in downtrends. If the DOW continues to lead/participate would think Intermediate wave iv is underway. Short term support is at SPX 2606 and the 2594 pivot, with resistance at the 2632 and 2646 pivots. Short term momentum ended the day oversold. Best to your trading!
MEDIUM TERM: uptrend topped?
LONG TERM: uptrend