SHORT TERM: FED rally continues, DOW +54
Overnight the Asian market caught FED fever +2.4%. European markets opened higher and gained 1.8%. US index futures were higher overnight as well. At 8:30 Retail sales were reported higher: +0.9% vs +0.8%, and the CPI was up too: +0.6% vs 0.0%. Then at 9:15 both Industrial production, (-1.2% vs +0.6%), and Capacity utilization, (78.2 vs 79.3), were reported lower. The market opened at the bull market high, SPX 1464, and continued to rally. At 10:00 Consumer sentiment hit a 5 year high: 79.2 vs 74.3, and Business inventories rose: +0.8% vs +0.1%. The market rally continued until 10:30 when the SPX hit 1475. With a reading of 98 on the hourly RSI the market started to pullback. Around noon the SPX hit 1465, bounced to 1470 by 12:30, and then headed lower again. Heading into the close the SPX hit 1462 and then bounced to close at 1466.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.85%. Bonds lost 29 ticks, Crude gained 70 cents, Gold rose $4, and the USD was lower. Medium term support for the SPX remains at the 1440 and 1389 pivots, with resistance at the 1499 and 1523 pivots. Last night the FED reported the M1- multiplier rose to 0.897 vs 0.867, as it continues to rise from mid-2011. Today the WLEI was reported at 52.1% vs 51.0%, the economy continues to grow.
The market opened at yesterday’s high today and made a new bull market high at SPX 1475 while getting extremely overbought. Then it began to pullback. Yesterday we noted we were using the SPX 1463/64 fibonacci resistance level as a pivot. Allowing the range of +/- seven points to dictate the next market move. This morning the market spiked through the upper end of the range at SPX 1471 on its way to 1475. But then just as quickly spiked down, back into the range again. As long as the market holds the fibonacci pivot range, (SPX 1456-1471), the market should move higher short term. If not, Intermediate wave iii may have completed this morning.
Short term support notches up to SPX 1463/64 and the 1440 pivot, with resistance now at the 1499 and 1523 pivots. Short term momentum hit one of its highest levels for the entire bull market this morning, and then began to decline. The short term OEW charts remain positive from SPX 1412, with the swing point now at 1440. This weekend report should be quite interesting. Best to your weekend!
MEDIUM TERM: new uptrend high SPX 1475
LONG TERM: bull market