Thursday update

SHORT TERM: gap down open then reversal, DOW +138

Overnight the Asian markets lost 0.8%. Europe opened lower but gained 0.3%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported lower: 263K v 277K. The market gapped down at the open to SPX 1990, dipped to 1988, and then began to rally. The market had closed at SPX 1996 yesterday. Just past noon the SPX hit 1998, pulled back to 1989 just past 1pm, then started to rise ahead of the FOMC minutes: http://www.federalreserve.gov/newsevents/press/monetary/20151008a.htm. Right after the minutes were released the SPX hit 2003, pulled back 1995, and then started to move higher again. Around 3:30 the SPX hit 2017, pulled back to 2009 in the closing minutes, then closed at 2013.

For the day the SPX/DOW gained 0.85%, and the NDX/NAZ gained 0.40%. Bonds lost 9 ticks, Crude rallied $1.85, Gold slid $6, and the USD was lower. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Export/Import prices at 8:30, then Wholesale inventories at 10am.

The market gapped down at the open today, dipped a bit lower, and then rallied for the rest of the day. After yesterday’s high at SPX 1999 we could count three waves up from the 1872 low using our smaller reversals, and five waves up with the larger ones. This was somewhat of a problem until today. After yesterday’s SPX 1976 low the smaller reversals went into a chop mode: 1996-1986-1998-1989. While the larger reversals suggested one wave up from that low. Looks like the market is still in the larger reversal mode. With this in mind we have updated our SPX hourly chart to display Int. waves i and ii at 1999 and 1976, with Int. iii of Major 3 underway now. Int. iii is currently still in its first wave up from SPX 1976. Short term support is now at SPX 2000 and the 1973 pivot, with resistance at the 2019 pivot and SPX 2040. Short term momentum ended the day quite overbought. Best to your trading!

MEDIUM TERM: uptrend

LONG TERM: bull market

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

Filed under: Updates