SHORT TERM: We have a couple of upside gaps: acceleration.
The market opened on a gap up today and for the first time in a long time, the gap wasn’t closed, and the market just kept on rising, hitting the highs for the day around mid-afternoon. The R2K and the NAZ made new highs today, yes the NAZ. In fact, the NAZ made a new closing high for the bull market. But the story of the day had to be the NDX, which outperformed all major indices +1.84%. A very nice liftoff to what appears to be wave 3 of this intermediate term advance.
At one point today something peculiar happened. As the Bond market was making new lows for the day, the stock indices were making new highs. It looked like an asset relocation was occurring. Considering that the investor bullish sentiment readings were near major lows two weeks ago (see NAZ weekly chart), we should not be surprised some are now just beginning to turn bullish.
I’ve added a NDX 15min chart to the photo section to illustrate the two upside gaps today. Also note, we made a slight divergence in RSI at the 2 PM highs today and are overbought on the MACD. In a strong uptrend, sometimes these signals are ignored and the market just keeps on going. However, I’d expect some softness early tomorrow to work off these overbought indicators to a neutral level before we start rallying again. As usual, the EW pivots have been working perfectly. They pinpointed the low in the NDX 2 1/2 weeks ago perfectly, hit the NAZ liftoff rally spot on the following wednesday, then pinpointed the rally high for wave 1, and identified the support levels for all four major indices during this multi-day pullback. I checked the charts and have a few targets for this particular wave: DOW 11350, SPX 1316, NDX 1735 and NAZ 2380. Best to your day!
INTERMEDIATE TERM: uptrend
LONG TERM: bullish