The Indian market was closed due to a senseless terrorist attack in Mumbai. The Asian markets open were all higher. Europe opened higher and closed +2.20%. US index futures traded lower overnight but the ES closed +3.0. After a quasi-weekend review of the charts this rally appears more encouraging than originally expected. The US market has rallied for 4 days in a row, the first time since May 2008. There are positive divergences on the daily and weekly charts, plus an extreme oversold condition on the monthly charts. The Yen appears to be in a downtrend, and the USD may have topped for now. Several of the aforementioned Asian markets also appear in uptrends. When confirmed, it will be their first uptrend in 5 – 6 months. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum is displaying a slight negative divergence at wednesday’s close. Should we get a confirmed uptrend, the likely upside targets remain SPX 1107 and SPX 1179. This would provide an excellent opportunity to exit this market, if you have not done so already. Happy Thanksgiving!
MEDIUM TERM: downtrend low at SPX 741
LONG TERM: bear market rally may be underway