SHORT TERM: market finally does rally, DOW up 90 points
The market opened mixed this morning despite stable markets in Asia and Europe. Throughout the morning the SPX toggled the long term pivot at 1462. Then just before noon the SPX hit its low for the day at 1454. After that the positive RSI divergence kicked in and the market rallied. At 3:30 the SPX hit its best level of the day 1478, just under the short term resistance pivot 1484 mentioned this morning. At the close the SPX/DOW rallied 0.85%, and the NDX/NAZ also rose 0.85%. Bonds are down nearly 1/4 point, Crude is off 35 cents, Gold is up $4.00, and the Euro was higher. When reviewing the charts one can easily see that the DOW/NAZ held the June lows as support. The SPX pulled back to that major long term pivot (1462) to find support. And the NDX held up better than all of them, finding support within the last rally up from its late June low. Longer term, I believe the NDX will be the clear leader for the rest of the bull market.
We noted several months ago, that when the recent uptrend ended, the correction will likely be the biggest one since 2003. Still hold that view. This is similar to what occurred in 1998 when the last extended Major wave 3 ended, which was also in July. Then, the market sold off in stages for about one month, into a late August low. Rallied for a few weeks into late September. Then made its final low in early October. After that, the market recaptured the entire decline in only several weeks. Will be tracking 2007 versus 1998. Currently, the SPX managed to hold the long term support pivot at 1462, and is trying to rally to the next resistance level at 1484. Short term momentum is rising. Best to your evening!
MEDIUM TERM: neutral
LONG TERM: bullish.