SHORT TERM: new bull market high, DOW +245
Overnight the Asian markets gained 0.2%. Europe opened higher and gained 2.7%. US index futures were higher overnight, and at 8:15 the ADP index was reported higher: 201K vs 163K. Then at 8:30 ECB president Draghi announced their upcoming bond buying program: http://www.ecb.int/press/pr/date/2012/html/pr120906_1.en.html. Also at 8:30 weekly Jobless claims were reported lower: 365K vs 374K. The market gapped up at the open to SPX 1412 and continued to rally. At 10:00 ISM services were reported higher: 53.7 vs 52.6. Nearing 11:00 the SPX made a new bull market high as the rally continued. With only a 3 point pullback along the way, the market rallied into the close hitting SPX 1432 and closed there.
For the day the SPX/DOW were +1.95%, and the NDX/NAZ were +2.20%. Bonds lost 20 ticks, Crude lost 55 cents, Gold rallied $6, and the USD was lower. Medium term SPX support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow, the Payrolls reports at 8:30 along with the Unemployment rate.
US index futures advanced overnight ahead of the ECB announcement. After ECB president Draghi’s speech index futures bounced around quite a bit before the market opened. At the open the SPX gapped over the upper downtrend line of the two-week triangle, then quickly cleared resistance at 1413/16. By 11:00 the SPX cleared the next resistance area at 1422/27 and made a new bull market high. Minor wave 4 ended in a triangular formation at tuesday’s SPX 1397 low. Minor wave 5, Intermediate wave iii, is currently underway.
The first level of resistance is at the OEW 1440 pivot range. Fibonacci wave relationships suggest this pivot will be cleared before Minor wave 5/Intermediate wave iii ends. The next resistance area is at SPX 1464/65. At this level Minor wave 5 equals Minor wave 1, and Intermediate wave iii equals 1.618 Intermediate wave i. Short term support is now at SPX 1422/27 and 1413/16, with overhead resistance at the 1440 pivot and SPX 1464/65. Short term momentum is extremely overbought, suggesting a pullback soon. The short term OEW charts turned positive at the open, with the swing point now at SPX 1411. Best to your trading!
MEDIUM TERM: uptrend new highs
LONG TERM: bull market