SHORT TERM: volatility continues, DOW -345
Overnight the Asian markets gained 1.3%. Europe opened higher and gained 1.4%. US index futures were higher overnight, and at 9am Case-Shiller was reported lower. The market gapped up at the open to SPX 2668. The SPX had closed at 2659 yesterday, after a huge 71-point rally. At 10am consumer confidence was reported lower. By 10:30 the SPX had pulled back to 2653. Then it rallied to SPX 2675 by noon. After the market pulled back to the lows of the day around 1:30 bottom fell out. By 3:30 the SPX had dropped to 2596. That’s decline of 80-points in 3.5 hours on no news. After that the market rebounded to SPX 2615 before settling at 2613.
For the day the SPX/DOW lost 1.6%, and the NDX/NAZ lost 3.1%. Bonds gained 17 ticks, Crude lost 90 cents, Gold dropped $7, and the USD was higher. Medium term support returns to the 2594 and 2575 pivots, with resistance at the 2632 and 2656 pivots. Tomorrow Q4 GDP (2.8%) at 8:30, and pending home sales at 10am.
A wild two days in the market, and it’s only Tuesday. After a huge gap up opening on Monday the SPX soared 71-points. There was some follow through this morning as the SPX tacked on another 16 points to yesterday’s close. Then Tech started to weaken, and weaken, and weaken some more. Eventually Tech gave back all of yesterday’s gains and even made a lower low than Friday. The rest of the market followed. Nevertheless, it looks like the market is finally getting close to ending this Intermediate wave iv correction. Not there yet, but daily RSI divergences appear to be setting up again. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: uptrend