10月16日
friday update
SHORT TERM: market pulls back on expiration friday, DOW -67
Overnight the Asian markets were mixed. Europe opened higher but closed -1.05%. US index futures at first were higher then lower overnight, and at 9:15 Industrial production was reported at +0.7% v +1.1%. The market gapped down to SPX 1090 at the open and continued lower. At 10:00 Consumer sentiment was reported lower: 69.4% v 73.5%. At 11:00 the SPX hit its low for the day at 1082 when the short term momentum touched the oversold level. This decline (SPX 1097-1082) again represents the typical pullback during this uptrend. The market then rallied for the rest of the day, retracing back to the opening level before pulling back some into the close. For the day the SPX/DOW were -0.75%, and the NDX/NAZ were -0.80%. Bonds were up 14 ticks, Crude gained $1.00, Gold added $2.00 and the Euro was lower. Short term momentum went from extremely overbought yesterday, to slightly oversold this morning and finished the day at neutral. Support for the SPX slips to 1061 and then 1041, with resistance again at 1090 and then 1107.
Today's pullback (15 pts) is similar to tuesday's pullback (12 pts). Both are the typical pullbacks for this uptrend. We've marked yesterday's SPX 1097 high as the end of Minute wave 3, and today's action looks to be part of Minute wave 4. From the SPX 1020 low we can now count three waves complete and the fourth underway of the expected five waves for this rally. Since wave 3 was 30 points (1067-1097), then wave 5 can not exceed 30 points or it would make wave 3 the shortest wave. Therefore, adding 30 points to today's 1082 low, if it holds, produces a maximum upside of SPX 1112. More on this in the weekend report. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market
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