Monday update

SHORT TERM: gap down opening, DOW -178

Overnight the Asian markets lost 0.1%. Europe opened lower and lost 3.1%. US index futures were sharply lower overnight, and the market gapped down at the open to SPX 1857. The market had closed at SPX 1880 on Friday. The market continued to decline to just past 10am when it hit SPX 1839. Then after a rally to SPX 1849 by 10:30 it made a lower low at 1833 by 11am. Another rallied followed to SPX 1848 by 12:30. Then the market made its low of the day at SPX 1828 at 2:30. After that the market rebounded strongly to hit SPX 1861 just past 3:30 before closing at 1853. Volatile day!

For the day the SPX/DOW lost 1.25%, and the NDX/NAZ lost 1.70%. Bonds gained 27 ticks, Crude dropped 85 cents, Gold rallied $15, and the USD was lower. Medium term support drops to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Today: long term investor sentiment was reported lower: 52.5% v 55.3%. Tomorrow: Wholesale inventories at 10am.

The market gapped down at the open to start the week. The fourth gap down opening in the past six trading days. The market opened below the two week support level at the 1869 pivot, and continued to decline. The first decline held the 1841 pivot, then the next decline found support at the 1828 pivot. There is a cluster of pivots in this area: 1818, 1828 and 1841. The next lower pivot is at SPX 1779. With todays’ drop below the SPX 1852 level, noted in the weekend update, it appears the first downtrend of this bear market is actually extending. While the SPX has still remained with the downtrend range (1812-2116), a break lower now appears more probable. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum rose to neutral after remaining extremely oversold early in the day. Best to your trading!

MEDIUM TERM: downtrend may be extending

LONG TERM: bear market

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

Filed under: Updates