SHORT TERM: gap up opening continues rally, DOW +128
Overnight the Asian markets gained 0.5%. European markets opened higher and gained 1.7%. US index futures were higher overnight too. At 8:30 the CPI was reported positive: +0.6% vs +0.6%. At 9:15 Industrial production was also reported positive: +0.4% vs -1.2%. The market gapped up at the open to SPX 1446 and continued to rally. The SPX closed at 1440 yesterday. At 10:00 the NAHB index was reported at a 6 year high: 42 vs 41. The rally continued until around noon when the SPX hit 1456. Then with an extremely overbought short term condition the market started to pullback. Just past 3:00 the SPX hit 1451, and then rallied into the close to end the day at 1455.
For the day the SPX/DOW were +1.00%, and the NDX/NAZ were +1.30%. Bonds lost 15 ticks, Crude added 25 cents, Gold rose $11, and the USD was lower. Medium term support rises back to the 1440 and 1389 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: Housing starts and Building permits at 8:30.
The market gapped up today, and continued yesterday’s rally as the SPX hit 1456. This is now a 30 point rise in just two trading days. A bit more than a 61.8% retracement of the entire 45 point decline. With the NDX/NAZ in a confirmed downtrend, and the SPX/DOW caught somewhere in the middle, the current situation is a tough call medium term. The OEW short term charts, however, swung positive at the open for the first time since the recent decline began. Tech stocks and AAPL performed well, but the banks did not. Short term the market is positive but extremely overbought. The next pullback/decline should give us a clearer picture medium term.
Short term support is at the 1440 pivot and SPX 1422/27, with resistance at SPX 1463/64 and the 1499 pivot. Short term momentum ended the day quite overbought. The short term OEW charts turned positive with the swing level now SPX 1443. Best to your trading!
MEDIUM TERM: uptrend in jeopardy
LONG TERM: bull market