SHORT TERM: FED rally continues, DOW +187
Overnight the Asian markets open were mixed, and Europe was closed for the holiday. Nevertheless US index futures rallied overnight, then bounced around into the morning. Nearing the opening, when rumors surfaced that JPM would raise its bid for BSC to $10/share, the index futures again moved higher. At the open the market gapped up, rallying right into the 1342 level by 10:00. Just at the time, the NAR reported that existing home sales for February rose 2.9%, beating expectations. The SPX continued the rally on the news, breaking through the 1344 pivot, and rallying close to the next EW pivot at 1364 by 1:00. After hitting SPX 1360 the market then eased back into the close. At the close the SPX/DOW were +1.50%, and the NDX/NAZ were +3.30%. Bonds lost nearly two points, Crude dropped $1.85, Gold was $3.00 lower, and the Euro was lower as well. Support for the SPX now notches up to 1344 and 1327, with resistance at 1364 and 1383. Short term momentum was overbought at the highs, with a slight negative RSI divergence, and backed off a bit into the close. The techs were strong today, the TRANsports confirmed a new uptrend, and with the break through SPX 1342 the major indices will likely do so as well. Tomorrow Case-Shiller home prices at 9:00, and the OFHEO home prices at 10:00, with a consumer confidence reading. Near term indicators today, reached the most overbought they have been since the bear market began. The downtrend was likely aborted, without reaching its target, again by FED intervention near the SPX 1270 level, as noted in the weekend report. Best to your trading!
MEDIUM TERM: downtrend likely aborted
LONG TERM: bear market