SHORT TERM: market edges higher for third day, DOW +59
Overnight the open Asian markets were all higher. Europe opened flat and closed -0.20%. US index futures were higher overnight, then at 9:00 Case-Shiller reported housing prices continued to fall at an annual rate of -18.2% v -18.0%. Nevertheless, the market opened slightly higher and rallied to SPX 847 in the opening minutes. While the market was pulling back the Conference board reported that Consumer confidence declined to record lows: 37.7% v 38.6%. At 11:00 William Dudley was named president of the NY FED, replacing now Treasury secretary Tim Geithner: http://www.newyorkfed.org/newsevents/news/aboutthefed/2009/oa090127.html. The market hit its low for the day around that time at SPX 835, and then rallied to 850 by 12:30. For the rest of the day the market went sideways, trading between 840 and 850 into the close. For the day the SPX/DOW were +0.90%, and the NDX/NAZ were +0.95%. Bonds rallied nearly one point, Crude lost $3.75, Gold slipped $11.00, and the Euro was higher. Support for the SPX remains at 789 and then 768, with resistance at 848 and then 912. Short term momentum was a bit overbought earlier, and closed there. Tomorrow, the FED concludes its 2-day FOMC meeting and will release a statement after 2:00.
The market remained within the SPX 804 – 858 range for yet another day. Again the market rallied to the 848 pivot today, where each rally continues stall since the SPX 804 low a week ago wednesday. This market appears to be waiting on the FED announcement before it makes its next move. These FOMC statements are often high volatility affairs. With Fed Funds set close to zero, and a bakers dozen alphabet swap programs already in progress. The interest would appear to be more in what the FED has to say about the economy rather than any changes in FED policy. If the SPX rallies to 857/858 tomorrow, and then starts to break, that’s probably it for this rally. Best to your trading!
MEDIUM TERM: downtrending
LONG TERM: bear market