SHORT TERM: gap up opening, DOW +217
Last night the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20120802a.htm. Overnight Asian markets lost 0.5%. European markets opened higher and closed +3.5%. US index futures were higher overnight. At 8:30 the Payrolls report came in higher than expected: +163K vs +80K, and the Unemployment rate rose to 8.3% vs 8.2%. The market gapped up at the open to SPX 1377 and continued to rally. The SPX had closed at 1365 yesterday. At 10:00 ISM services was reported higher: 52.6 vs 52.1. The market continued to rally. Around noon the SPX hit 1394, a new uptrend high, and then went sideways for a while before dipping to 1389 by 3:30. Then it bounced into the close to end the week at SPX 1391.
For the day the SPX/DOW were +1.80%, and the NDX/NAZ were +1.90%. Bonds lost 21 ticks, Crude soared $4.10, Gold rallied $14, and the USD was substantially lower. Medium term support rises to the 1386 and 1372 pivots, with resistance now at the 1440 and 1499 pivots. Short term momentum was quite overbought, then dipped some. Yesterday, long term investor sentiment was reported higher: 49.8% vs 48.8%. Today the WLEI was reported higher: 48.7% vs 48.4%.
Three days in a row of gap openings, up-down-up, ended the week with the market making a new uptrend high. While SPX 1344 appeared to be the key level heading into this week. SPX 1355 has now established itself as the key level to watch going forward. This uptrend has had such choppy wave action that it needs to continue impulsing. The rallies off of last week’s SPX 1329 low, and this week’s SPX 1355 low are impulse waves.
Today’s gap up opening was quite strong carrying the SPX to 1394 before it had the first noteable pullback. Short term support is now at the 1386 and 1372 pivots, with resistance at SPX 1402/03 and 1413/15. Short term momentum backed off some from quite overbought. The short term OEW charts turned positive again at the open, with the swing point now at SPX 1374. Best to your weekend!
MEDIUM TERM: uptrend starting to impulse
LONG TERM: bull market