SHORT TERM: more FED talk more rally, DOW +115
Overnight the Asian markets were mostly higher with only Japan displaying a loss. Europe again came in higher +0.80%, and the closed the day +1.50%, very similar to yesterdays action. US index futures were mostly flat overnight, but sold off this morning after the core PPI was announced at a higher than expected +0.4%. The market opened lower and hovered around the 1364 support pivot, while a consumer sentiment reading was reported far lower than expected. By 11:00 the market reversed and started to rally taking out yesterday’s 1374 high. When FED vice chairman Kohn speech: http://www.federalreserve.gov/newsevents/speech/kohn20080226a.htm was released, and Moody’s reaffirmed the AAA rating on MBIA. The rally continued to SPX 1387 the high for the day. After 1:00 the rally lost some upside momentum and eased back into the close. For the day the SPX/DOW were + 0.80%, and the NDX/NAZ were +0.55%. Bonds gained about 4 ticks, Crude added $1.80, Gold rallied $10.00, and the Euro gained about 1%. Support for the SPX remains at 1364 and then 1344, with resistance at 1383 and then 1410. Short term momentum was overbought at today’s highs, but eased back some into the close. Tomorrow durable goods and new home sales in the morning, as well as, speeches by Bernanke and Mishkin at 10:00. Still expecting this rally to continue to the 1396 level to form a double top. Best to your trading!
MEDIUM TERM: uptrend still underway, but nearing 1396
LONG TERM: bear market