SHORT TERM: market reverses FED rate cut selling, DOW +208
Overnight the Asian markets were mixed, as early selling turned to gains in Australia and Japan, but led to loses in the other indices as the night wore on. Europe came in substantially lower but ended their session mixed. US stocks opened lower on overnight selling, and the higher than expected unemployment claims. Within the first few minutes the SPX slid down to 1334, but that was the low for the day. After that the market staged a broadbased rally, pausing at 1372 by 12:00, pulling back to 1360 by 1:00, and then continuing higher into the close. Almost reaching the best levels achieved after the FED announced the 50 bps cut yesterday. For the day the SPX/DOW gained 1.65%, and the NDX/NAZ added 1.70%. Bonds gained over 1 1/4 points, Crude lost $1.00, Gold gained $6.00, and the Euro was lower. Support for the SPX has moved up to 1364 and then 1344, with resistance at 1383 and then 1406. Short term momentum fell short of being oversold this morning, and is now naturally rising. Strength in the very weak sectors like the financials, banks, housing, consumer discretionary, and the transports have helped this rally thus far. Should this continue then the SPX 1438 target would appear achievable in February. Tomorrow, however, is the jobs report and ISM. This market continues its extreme volatility.
MEDIUM TERM: rally resumes from the recent SPX 1270 low
LONG TERM: bear market