Monday update

SHORT TERM: gap up opening volatile day, DOW +52

Overnight the Asian markets lost 1.1%. Europe opened lower and lost 0.4%. US index futures were lower, then higher overnight. The market gapped up at the open to SPX 1934, ticked up to 1936, and then started to pullback. The market had closed at 1922 on Friday. At 10:30 the market closed the gap when hitting SPX 1921, rallied to 1930 just before 11am, and then headed lower again. Just past 11am the market hit SPX 1914, rallied to 1926 by noon, and then hit the 1901 pivot exactly just before 2pm. After that the market rallied to SPX 1917 by 2:30, pulled back to 1905 just before 3pm, then hit 1930 around 3:30. Then the market pulled back to close at SPX 1924.

For the day the SPX/DOW gained 0.20%, and the NDX/NAZ were mixed. Bonds lost 6 ticks, Crude dropped $2.05, Gold slid $9, and the USD was higher. Medium term support remains at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: a speech from FED vice chair Fischer before the market opens.

The market had a gap opening for the seventh day in a row: 4 dn – 3 up. After hitting SPX 1936 right after the open the market worked its way down to the 1901 pivot by 2pm. After that the market rallied: 1917-1905-1930. This 29 point rally is the best rally since the SPX 2022 decline began. Since the SPX 2082 decline began, the best rally has been 32 points. Often best rallies, off lows, signal the start of a reversal. Thus far this lengthy decline has been held in check by the 1901 pivot. Need to see five waves up from that low in order put a green Major 2 on the chart. Short term support is at SPX 1916 and the 1901 pivot, with resistance at the 1929 and 1956 pivots. Short term momentum finally picked up off that positive divergence. Best to your trading!

MEDIUM TERM: downtrend

LONG TERM: bull/bear market at inflection point

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

Filed under: Updates