SHORT TERM: market tries to rally, DOW +13
Overnight the Asian markets gained 1.2%. European markets opened higher and gained 0.5%. US index futures were higher overnight as well. At 8:30 Housing starts were reported higher: 750K vs 746K, and Building permits were lower: 803K vs 812K. The market opened one point higher than yesterday’s SPX 1459 close. In the first few minutes the SPX dipped to 1458 and rallied to 1463 by 10:00. At ten Existing home sales were reported higher: 4.82 mln vs 4.47 mln. After another pullback to SPX 1458 by 10:30 the market tried to rally again. Just past 3:00 the SPX hit 1465 for the second time in the day, and then pulled back into a 1461 close.
For the day the SPX/DOW were +0.10%, and the NDX/NAZ were +0.20%. Bonds gained 7 ticks, Crude dropped $3.65, Gold was flat, and the USD was lower. Medium term support remains at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: weekly Jobless claims at 8:30, then the Philly FED and Leading indicators at 10:00.
The market opened slightly higher today, dipped to SPX 1458, rallied to 1463, then retested 1458 before heading higher. It did look like the market was ready to move to higher highs. But it is still hovering around resistance at the SPX 1463/64 fibonacci pivot. Even though the SPX held support, at the lower end of the SPX 1456-1471 pivot range, on tuesday. The current three day selloff in Crude is reminiscent of the last time the FED announced a QE program on November 3, 2010. Then, a few days after the announcement, Crude dropped 10% and the SPX pulled back about 4%. Crude has already declined 10% in just three trading days. If the SPX pulls back again, and breaks through the 1456 level, we could be looking at a pullback into support at the 1440 pivot and then 1422/27. SPX 1456 now takes on more significance as the market heads into Options expiration friday.
Short term support remains at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum was nearly quite overbought today, and then declined to neutral. The short term OEW charts remain positive from SPX 1412, with the swing point now at 1451. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market