SHORT TERM: lower open then consolidation day, DOW -40
Overnight the Asian markets lost 1.6%. Europe opened lower but ended mixed. US index futures were lower overnight, and at 8:30 the ADP was reported lower. The market opened 5 points below yesterday’s SPX 2630 close. That was the low for the day. After a rally to SPX 2632 by 10am, the market retested 2625 by 10:30. After that the SPX rallied to 2634 by 11:30, only to pullback to 2626 by 12:30. Another rally to SPX 2634 ended with a pullback to 2629 at the close.
For the day the SPX/DOW lost 0.10%, and the NDX/NAZ gained 0.35%. Bonds rose 8 ticks, Crude lost $1.65, Gold slipped $3, and the USD was higher. Medium term support remains at the 2594 and 2575 pivots, with resistance at the 2632 and 2646 pivots. Tomorrow: weekly jobless claims at 8:30, then consumer credit at 3pm.
The market opened at SPX 2625, bounced, then retested 2625 before edging higher. Have seen subtle double bottoms like this hold. Especially since the decline from SPX 2665 is within one point of a 38.2% pullback of the advance from SPX 2557. The advance off the SPX 2625 low, however, was not impressive: 2634-2626-2634. But have seen this type of churning at a low set up a higher opening the next day. Key level going forward is obviously SPX 2625. Overall, it still looks like traders are in profit taking mode which could lead to the Int. iv correction. All they might need is some sort of catalyst to push things lower. If so would expect a 100 – 120 point decline from the all-time high for Int. iv. The two fours: Minute iv and Micro 4 should provide support. Short term support is at SPX 2625 and SPX 2606, with resistance at the 2632 and 2646 pivots. Short term momentum ended above neutral after hitting oversold. Best to your trading!
MEDIUM TERM: uptrend topped?
LONG TERM: uptrend