SHORT TERM: uptrend continues, DOW +7
Overnight the Asian markets were mostly lower, losing 0.7%. European markets opened lower and lost 0.2%. US index futures were relatively flat overnight, and the market opened slightly higher at SPX 1405. The SPX had closed at 1404 on friday. In the opening minutes the SPX dipped to 1402 and then started to rally. Just after the open FED director Killian’s congressional testimony was released: http://www.federalreserve.gov/newsevents/testimony/killian20120319a.htm. Then at 10:00 the NAHB was reported lower: 28 vs 29. The market continued to rally, clearing SPX 1407 around 11:30, and rose above 1410 to 1414 by 2:00. Then a modest pullback followed in the closing hour to SPX 1409, and the SPX ended at 1410.
For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.75%. Bonds lost 18 ticks, Crude gained 90 cents, Gold added $3, and the USD was lower. Support for the SPX remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum declined only slightly after a negative divergence, then spiked to extremely overbought again. Tomorrow, Housing starts and Building permits at 8:30. Then at 12:45 FED chairman Bernanke starts his four part lecture on the financial crisis.
The market opened about flat this morning then ralled through the first fibonacci resistance level at SPX 1407. At this level Intermediate wave five = 0.618 Int. wave one. The next fibonacci resistance level is at SPX 1448. There Int. wave five will equal Int. wave one and 0.618 Int. wave three. Prior to this level we have an OEW pivot at SPX 1440. With the SPX currently around 1410 there is little overhead resistance until it reaches the 1440′s. However, this current rally, from SPX 1340, has only had minimal pullbacks of 8 and 9 points respectively. Typically, during this uptrend, pullbacks that have marked notable waves have ranged between 11 – 20 points, or more. A pullback of this size can occur at any time. When it does, it will probably mark the end of Minor wave 1, of Int. wave five, with Minor wave 2 underway. Intermediate wave five should consist of five Minor waves. Short term support is at the 1386 and 1372 pivots, with overhead resistance at the 1440 and 1499 pivots. Short term momentum was extremely overbought, then declined towards neutral. Best to your trading!
MEDIUM TERM: uptrend new high SPX 1414
LONG TERM: bull market