SHORT TERM: gap up opening, DOW +78
Overnight the Asian markets ended higher +0.7%. European markets opened higher but lost 0.2%. US index futures were higher overnight. At 8:30 the CPI was reported: +0.2% vs +0.2%, and at 9:15 Industrial production was reported higher: +0.4% vs -0.1%: http://www.federalreserve.gov/releases/g17/current/. The market gapped up at the open to SPX 1359, and hit 1361 in the opening minutes before starting to pullback. The SPX had closed at 1354 yesterday. At 10:00 the NAHB index was reported at its highest level since 2007: 35 vs 29, and FED chairman Bernanke’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/bernanke20120717a.htm. The pullback continued until around 10:30 when the SPX hit 1345. Then the market reversed again and started to rally. With 2-3 point pullbacks along the way the market rallied to SPX 1365. Then dipped to close at SPX 1364.
For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.50%. Bonds lost 9 ticks, Crude added 50 cents, Gold slid $8, and the USD was higher. Support for the SPX remains jumps to the 1363 and 1313 pivots, with resistance at the 1372 and 1386 pivots. Short term momentum posted a negative divergence this morning, dropped, and is noe creating another negative divergence. Tomorrow, Housing starts and Building permits at 8:30, then the FED’s beige book at 2:00.
Somewhat of a wild ride today. Market gapped up at the open, hit the 1363 pivot range, and then immediately dropped to short term support at SPX 1342/47. After that it rallied right back to the 1363 pivot range, making a higher high on the day. The choppy action in this uptrend continues. Now that the SOX index has confirmed a downtrend, suggesting it is heading into its 2-year cycle low. This should put some pressure on the current general market uptrend.
Short term support is now at the 1363 pivot, then SPX 1342/47 and 1333/38. Overhead resistance is at the 1372 and 1386 pivots. Short term momentum appears to be setting up another negative divergence. The short term OEW charts remain positive with the swing point around 1350. Best to your trading!
MEDIUM TERM: choppy uptrend continues
LONG TERM: bull market