SHORT TERM: market consolidates after hitting SPX 1130, DOW +27
Overnight the Asian markets were mixed. Europe opened higher and closed +0.80%. US index futures were flat overnight. At the open the market edged higher and then hit a new uptrend high at SPX 1130 in the first few minutes. After hitting an extremely short term overbought condition the market started to pullback. By 11:00 the SPX had drifted down to 1127. It then traded within a one SPX point range for three hours before drifting down to 1124 by 2:30. Around that time the FED issured the following press release: http://www.federalreserve.gov/newsevents/press/monetary/20091228a.htm. Then the market rallied a few points heading into the close. For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.35%. Bonds lost 7 ticks, Crude gained 65 cents, Gold added $3.00, and the USD was lower. Support for the SPX remains at 1107 and then 1090, with resistance at 1133 and then 1168. Short term momentum was extremely overbought early this morning and declined past neutral during the day. Tomorrow at 9:00 Case-Shiller home prices, and then at 10:00 Consumer confidence.
The market continued to extend its rally from the SPX 1086 low on Dec 9th, and the wave 2 low at SPX 1094 on Dec 18th. Today the SPX moved closer to the OEW 1133 pivot level when hitting 1130. The market clearly appears to be running into some short term resistance at this pivot. And, it does look like this pivot should hold for all of wave 3. Thus far, this five wave rally displays the following charteristics: wave one 30 SPX points, wave two 22 SPX points, and wave three 36 SPX points. Wave three is already longer than wave one, which allows wave five plenty of room to reach the targeted OEW pivot range at SPX 1168. Best to your trading, and happy holidays!
MEDIUM TERM: uptrend new high SPX 1130
LONG TERM: bear market rally