Wednesday update

SHORT TERM: gap down opening selloff, DOW -373

Overnight the Asian markets lost 0.2%. Europe opened lower and lost 1.1%. And there was another round of DC drama. US index futures were lower overnight, and the market gapped down 20 points at the open to SPX 2381. The market had closed at SPX 2401 yesterday. Around 11am the SPX hit 2368, bounced to 2376 by noon, then headed even lower. At 2:30 the SPX hit 2360, bounced to 2368 by 3:30, dropped to 2356 in the last few minutes, and closed at 2357.

For the day the SPX/DOW lost 1.80%, and the NDX/NAZ lost 2.55%. Bonds gained 28 ticks, Crude rose 30 cents, Gold rallied $21, and the USD was lower. Medium term support drops to the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow: weekly jobless claims and the Philly FED at 8:30, then leading indicators at 10am.

The market gapped down at the open for the first time since last Thursday. In fact the market has had one gap down opening each of the prior three weeks, without any gap up openings. Today’s decline opened below the previous 4th wave at SPX 2382, confirming the five waves up from SPX 2329 was a completed pattern. During the day we updated the SPX chart to display a tentative green Minor 5/Minute i. Should the market continue to decline to SPX 2329, then the Minor 5 is the correct label. Should it not and resume the uptrend, then the Minute i label is the correct label. After five waves up the market was due for a pullback of some degree. What degree it was we could find out during options expiration: Thursday/Friday. Short term support is at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Short term momentum hit extremely oversold this morning and ended the day with a positive divergence. Trade what’s in front of you!

MEDIUM TERM: uptrend

LONG TERM: uptrend

CHARTS: https://stockcharts.com/public/1269446/tenpp

Filed under: Updates