SHORT TERM: July rally extends, DOW +102
Overnight the Asian markets were all higher. Europe opened higher but closed mixed. US index futures were slightly higher overnight but headed lower into the open. Trading started the day with the SPX opening at 1091. It had closed at SPX 1094 yesterday. A choppy beginning unfolded in the first half hour of trading as the SPX hit 1089, then 1094, and finally 1088 by 10:00. That was the low for the day, right at the OEW 1090 pivot. A rally followed until noon when the SPX retested yesterday’s 1098 high. A pullback to SPX 1090 followed by 1:00. Then the market surged, taking out this weeks 1098 high and last weeks 1099 high on its way to SPX 1104 by 2:00. After a pullback to SPX 1097 by 3:30 the market closed at 1103.
For the day the SPX/DOW were +0.90%, and the NDX/NAZ were +0.85%. Bonds lost 15 ticks, Crude slid 25 cents, Gold dropped $8.00, and the USD was lower. Support for the SPX remains at 1090 and then 1058, with resistance at 1107 and then 1136. Short term momentum pulled back to neutral early, then was slightly overbought at the close. The WLEI was again reported lower today: 39.5% v 40.2%, and there was a downtick reported in the M1 Multiplier last night as well. The economy continues to contract.
Market technicals, however, continue to improve. Currently five of the thirteen foreign indices we follow are in confirmed uptrends. Also, five of the nine SPX sectors are in confirmed uptrends. The NYAD (NYSE advance-decline) market breadth is in a confirmed uptrend as well. And, the market generated another WROC buy signal. The rally from the early July SPX 1011 low extended today to 1104. This 93 point rally is the best one since the 98 point "flash low" reflex rally in May, a couple of weeks after the correction started in April. With the market finally clearing the 1090 pivot today and resistance at 1099/1100, the count we have been tracking remains in place: Intermediate waves one (1099) and two (1057), with Minor waves 1 (1089) and 2 (1065) of Intermediate wave three. The next hurdle for this market is to clear the OEW 1107 pivot, and then, confirm an uptrend. Support remains at 1058 and key support at 1041. Best to your weekend!
MEDIUM TERM: downtrend low SPX 1011
LONG TERM: bull market