SHORT TERM: gap down opening, then volatile day, DOW -724
Overnight the Asian markets lost 0.2%. Europe opened lower and lost 1.4%. US index futures were lower overnight, and the market gapped down to SPX 2679 at the open. The market had closed at SPX 2712 yesterday. Just before 10am the market rebounded to SPX 2696, but reversed and dropped to 2662 by 11:30. The market then rallied to SPX 2685 by 12:30, dropped to 2670 by 1pm, then rallied to 2690 by 1:30. After that it headed right back down toward the lows of the day. In the closing hour the SPX hit 2642, then closed at 2644.
For the day the SPX/DOW lost 2.40%, and the NDX/NAZ lost 2.35%. Bonds gained 19 ticks, Crude dropped 95 cents, Gold slid $5, and the USD was higher. Medium term support drops to the 2632 and 2594 pivots, with resistance at the 2656 and 2731 pivots. Tomorrow: durable goods at 8:30, then new home sales at 10am.
The market gapped down at the open today for the second time this week. Monday’s gap down broke the impulsive possibility of an uptrend. Today’s gap down broke support around SPX 2700, and the market moved much lower. Overall, a big day on the downside. The recent C wave decline has nearly reached a 61.8% retracement of wave B (2533-2802), and there is a potential positive divergence at today’s low. Due for a bounce in this volatile environment? Looking out a few days/weeks, a return to SPX 2533 appears to be the markets objective. Short term support is at the 2632 and 2594 pivots, with resistance at the 2656 and 2731 pivots. Short term momentum displaying a +div. Best to your trading!
MEDIUM TERM: downtrend continues
LONG TERM: uptrend