SHORT TERM: market gaps up and rallies, DOW +96
Overnight the Asian markets were relatively flat. Europe opened higher and gained 1.7%. US index futures were higher overnight. Last night the FED released counsel Alvarez’s testimony: http://www.federalreserve.gov/newsevents/testimony/alvarez20120619a.htm. This morning, at 8:30, Housing starts were reported lower: 708K vs 717K, but Building permits were higher: 780K vs 715K. The market gapped up at the open to SPX 1350 and continued to rally. The SPX had closed at 1345 yesterday. The rally continued, with small 2 to 3 point pullbacks, to precisely the OEW 1363 pivot around 1:30. Then after hitting extremely overbought the market started to pullback. At 2:30 the SPX hit 1357, rallied to 1362 by 3:30, then pulled back to close at 1358.
For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +1.15%. Bonds lost 8 ticks, Crude gained 80 cents, Gold slipped $7.00, and the USD was lower. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum hit extremely overbought during today’s rally. Tomorrow, the FOMC statement at 12:30.
The market gapped up at the open today, balancing yesterday’s gap down opening. The market opened at a new rally high, SPX 1350, and continued on to 1363 before experiencing its first noticeable pullback. This market has now rallied nearly 100 SPX points in just two weeks. We continue to count this first rally, in the potential uptrend, as Intermediate wave i. Minor wave 1, of Int. i, ended at SPX 1336, and Minor 2 ended at SPX 1307. Minor wave 3 has been underway since then.
We have been expecting a rally, from the recent SPX 1267 low, to the OEW 1363 or 1372 pivot range. That was accomplished today. The rally, however, looks like three waves so far and this is a bit of a concern. We were hoping to see five waves up into tomorrow’s FOMC statement. Short term support is now at SPX 1342/47 and 1335/36, with resistance at the 1363 and 1372 pivots. Short term momentum is declining after hitting extremely overbought. The short term OEW charts remain positive, from under SPX 1300, with the swing point now at SPX 1333. Be careful tomorrow, markets may become quite volatile!
MEDIUM TERM: uptrend likely underway
LONG TERM: bull market