SHORT TERM: gap down opening DOW -193
Overnight US index futures were lower, and at 8:30 retail sales and the NY FED were reported higher. Nevertheless the market gapped down at the open to SPX 2715, and continued down to 2704 by 10am. At 10am the Home builders index was reported higher. A rallied followed to SPX 2716 by 10:30, then the market entered a choppy trading range between 2702 and 2715 for the rest of the day. Ending the day with a bounce to SPX 2711.
For the day the SPX/DOW lost 0.75%, and the NDX/NAZ lost 0.95%. Bonds lost 24 ticks, Crude added 50 cents, Gold dropped $28, and the USD was higher. Medium term support remains at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Tomorrow: housing starts, building permits at 8:30, then Industrial production at 9:15.
After a rally on Monday, when the SPX rose to 2742, between the 2731 pivot and the 2750 trend line resistance. The market closed under the pivot on Monday, then gapped down to open Tuesday. Index trading was mostly to the downside on Tuesday, as the 10YR resumed heading lower with yields rising to 7-year highs. The stock market rallied recently as yields hovered slightly above and below 3%. With yields on the rise again, equities are again feeling selling pressure. The three scenarios noted on Thursday are still in tack, and are posted on the SPX hourly/daily and DOW daily charts. The triangle scenario remains the preferred short term count. Short term support is at the 2656 and 2631 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum displayed a negative divergence yesterday, hit oversold today, then bounced higher. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend