SHORT TERM: market gains despite more negative news, DOW +184
Overnight the Asian markets were mixed. Europe opened higher and closed +2.95%. US index futures were quiet overnight, and at 9:00 Case-Shiller reported national housing prices were down 18% in the last 12 months, down 2.2% in October. The market opened slightly higher, nevertheless, at SPX 872. That was the low in another day of quiet trading. At 10:00 the Conference board reported consumer confidence had dropped to 38.0% v 44.7% in November, a record low. The market continued to rally until 12:00 when it hit 885. A pullback followed for the next few hours until 3:00 to SPX 879. Clearly no volatility. Then the market rallied into the close and exceeded last weeks high of 887 just before the close. For the day the SPX/DOW were +2.30%, and the NDX/NAZ were +2.50%. Bonds were down 11 ticks, Crude lost 65 cents, Gold slipped $2.50 and the Euro was higher. Support for the SPX is still at 848 and then 789, with resistance at 912 and then 935. Short term momentum was overbought at the close with a new slight negative divergence. Tomorrow the weekly Unemployment claims will be reported at 8:30.
After retesting last weeks low on monday at SPX 857. The market has rallied to take out last weeks high at 887 on very light volume. Tomorrow will probably be even quieter than today, and friday January 2nd will probably not be all that much different. With a slight negative divergence on the hourly charts the market may pullback tomorrow and into friday. However it should stay within the range of the last two weeks. Still looks like this uptrend has a lot more to go on the upside medium term. As soon as the SPX breaks through the 912 pivot it should be on its way. It’s unlikely that will occur before next week. Happy New Year!
MEDIUM TERM: uptrend from SPX 741 still underway
LONG TERM: bear market rally