SHORT TERM: market experiences its first 5-day rally since May 2007, DOW +102
Overnight the Asian markets were mostly higher, and India opened its exchange. Europe opened lower, but closed +0.60%. US index futures were mostly unchanged overnight, and lacking any news this morning the market opened flat. By 10:00 the SPX pulled back to 881, that was the low for the day. Then the market worked its way higher, taking out wednesdays high of SPX 888 when it hit 896 near the close. Overall a fairly quiet day, with light volume and no volatility. At the close the SPX/DOW were +1/05%, and the NDX/NAZ were mixed. Bonds were up about 16 ticks, Crude lost $2.00, Gold gained $7.50, and the Euro was lower. Support for the SPX remains at 848 and then 789, with resistance at 912 and then 935. Short term momentum is overbought, with a negative divergence, and remained there all day.
This market continues to act well. Several of the Asian markets have confirmed uptrends for the first time in many months, and Brazil is on the verge of doing so as well. The Yen looks like it will confirm a downtrend, while the USD may have topped recently too. While economic reports will continue to be negative for quite some time to come. The market looks like its quite oversold and staging a bear market rally. Next week, when many return to the action, we’ll get a better idea of what to expect over the next couple of months. Best to your weekend!
MEDIUM TERM: downtrend low at SPX 741
LONG TERM: bear market rally may finally be underway