SHORT TERM: gap up opening as rally continues, DOW +241
The first three days of the week display Asian markets up 2.7%, and European markets up 3.1%. US markets started the week at SPX 2659. Gapped up on Monday, hit SPX 2707, then did another 100-point selloff to 2604. If the market continues its 100-points drops, followed by 60+ point rallies, the 2594 pivot could be next and last for now. After that the market rallied into the close Monday, rallied again on Tuesday, then gapped up again on Wednesday hitting SPX 2737. Biggest rally (2604-2737) since the downtrend began.
Today we posted a tentative green Minor wave A at the SPX 2604 low. We posted this label for four reasons. 1. the short term down-100, up-60 pattern has changed. 2. the SPX crossed out 2723 reversal target. 3. the downward expanding diagonal looks complete at the lows. And 4. wave C (213) nearly equals wave A (230). Next we should see a 50% to 61.8% retracement of the entire SPX 2941-2604 decline: SPX 2773 – 2812. With the previous B wave at SPX 2817, the retracement may go a bit higher than 61.8%.
Short term support is at the 2656 and 2632 pivots, with resistance at the 2731 and 2780 pivots. Short term momentum finally reached overbought after a huge double positive divergence. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: downtrend probable