SHORT TERM: flat open then decline, DOW -299
Overnight the Asian markets finished mixed. Europe opened higher but lost 0.1%. US index futures were relatively flat overnight. At 8:30 durable goods were reported lower and at 9am Case-Shiller was reported higher. The market opened three points below yesterday’s SPX 2780 close, then rallied to 2789 by 10:30. At 10am consumer confidence was reported higher. After that, as the new FED chair Powell began to give his testimony the market declined: https://www.federalreserve.gov/newsevents/testimony/powell20180226a.htm. Yesterday the new FED vice chair Quarles gave two speeches: https://www.federalreserve.gov/newsevents/speech/quarles20180226a.htm, and https://www.federalreserve.gov/newsevents/speech/quarles20180226b.htm. Around 12:30 the SPX hit 2757, rallied to 2773 by 1pm, then heading into the close the market hit 2744 and closed there.
For the day the SPX/DOW lost 1.20%, and the NDX/NAZ lost 1.25%. Bonds lost 12 ticks, Crude dropped $1.00, Gold fell $14, and the USD was higher. Medium term support remains at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Tomorrow: Q4 GDP (est. +2.5%) at 8:30, the Chicago PMI at 9am, and pending home sales at 10am.
The market opened slightly lower today after yesterday’s strong rally. Moved back into rally mode until 10:30. Then pulled back for the rest of the day. From Thursday’s SPX 2698 low the market had rallied 91 points to 2789 this morning. Today’s pullback appears to be in response to the overbought conditions after that rally. In fact, the point decline looks to be nearly sufficient for the second wave in this rally from SPX 2698: 2789-2744-xxxx. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended oversold after being quite overbought. Best to your GDP trading!
MEDIUM TERM: uptrend probably underway
LONG TERM: uptrend