SHORT TERM: market reverses with gap up opening, DOW +99
Overnight the Asian markets lost 1.6%. Europe opened higher and gained 0.7%. US index futures were much higher overnight. At 8:30 FED govenor Duke’s speech was released: http://www.federalreserve.gov/newsevents/speech/0B9C77F2D3A64FEEBFDB8055E691E451.htm. The market gapped up at the open to SPX 1502 and continued to rally. The SPX had closed at 1496 yesterday. At 10:00 ISM services was reported lower: 55.2 vs 56.1. The rally continued until 11:00 when the SPX hit 1510. After a small two point pullback to SPX 1508 by noon, the rally resumed. Around 3:00 the SPX hit a new uptrend high at 1515, then pulled back to 1510, before closing at 1511.
For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +1.35%. Bonds lost 7 ticks, Crude gained 55 cents, Gold closed flat, and the USD was lower. Medium term support jumps back to the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots. Tomorrow nothing scheduled on the economic/FED front.
The market opened today with a gap up, following monday’s gap down and friday’s gap up. A developing increasing volatility pattern underway? If we view the recent activity using the 1499 pivot as guide we observe the following. Last wednesday the SPX hits 1510, thursday it loses the pivot hitting 1497, friday it regains the pivot hitting 1514, monday it loses the pivot again hitting 1495, and today it regains the pivot hitting 1515. This may be some sort of Minor wave 4 expanding triangle underway, especially if the market heads right back down again tomorrow. Either a triangle, or Minor 3 is extending, or a B wave. Obviously a tricky short term juncture in this uptrend. For now we’ll keep the charts as posted and see how the market deals with this recent activity.
Short term support rises back up to the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term momentum rebounded from yesterday’s oversold condition to overbought today. The short term OEW charts turned positive again at the open with the reversal level now around 1503. Choppy market, best to your trading!
MEDIUM TERM: uptrend new high SPX 1515
LONG TERM: bull market