SHORT TERM: stocks rally after extended weekend.
Hope everyone enjoyed their Memorial Day weekend. While we were closed, the Asian markets continued to move higher, with China’s SSEC and India’s BSE showing the best gains. This morning Europe was up about 0.30% as trading began in the US. Stocks rallied at the opening following our foreign partners lead, as the SPX rallied to 1521, just one point shy of the short term overhead resistance level at 1522. Short term momentum is beginning to get a bit overbought. At 9:00 the S&P/Case-Shiller announced that national home prices fell for the first time since 1991, down 1.4%. This kicks off the economic reports expected this week. Tomorrow before the open is the ADP employment report. On thursday the revised Q1 GDP will be reported, along with the Chicago PMI. On friday Core PCE, non-farm payrolls, and the ISM. Could be a volatile week. Bonds are flat, Crude is $1.50 lower, Gold is $4.00 higher, and the Euro is up today. After last week’s break of the two month uptrend support line, the market has managed to bounce back, in what appears to be an ABC rally thus far. Before this week is out we should know if the market plans to extend this uptrend, or turn over into a correction. The OEW price targets were hit last week, therefore we remain neutral on the market medium term. Best to your week!
MEDIUM TERM: neutral, targets hits
LONG TERM: bullish.