SHORT TERM: markets gaps up, DOW +51
Overnight the Asian markets gained 0.8%. European markets opened higher and gained 0.9%. US index futures were higher overnight as well. The market gapped up at the open to SPX 1400, the uptrend high, and continued to rally. At 10:30 the SPX hit 1404, pulled back a couple of points, then hit 1407 by 1:00. After setting up a short term negative divergence the market started to pullback. At 2:30 FED chairman Bernanke’s speech: http://www.federalreserve.gov/newsevents/speech/bernanke20120807a.htm. Heading into the close the SPX hit 1401 and closed there.
For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.85%. Bonds lost 17 ticks, Crude rallied $1.30, Gold added $1, and the USD was flat. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Short term momentum displayed a negative divergence at today’s highs. Tomorrow, Productivity at 8:30.
The market gapped up for the fifth time in the past nine trading days. The SPX opened at the uptrend high, 1400, and continued on to 1407 before pulling back in the afternoon. With a short term negative divergence now in place on the hourly charts, a 10+ point pullback is possible. This market has had a nice run, from SPX 1355-1407, with nothing more than 5 and 6 point pullbacks.
Internally: all 9 SPX sectors are in uptrends, market breadth (NYAD) continues to make new highs, and nearly all of the foreign stock indices are in or appear to be beginning uptrends. This uptrend is starting to gain upside momentum.
Short term support remains at the 1386 and 1372 pivots, with resistance at SPX 1402/03 and 1413/15. Short term momentum is displaying a negative divergence. The short term OEW charts remain positive with the swing point around SPX 1385. Best to your trading!
MEDIUM TERM: new uptrend high
LONG TERM: bull market