SHORT TERM: gap down opening retests 1090 pivot again, DOW -53
Overnight most of the Asian markets were lower. Europe opened lower and closed -1.35%. US index futures were lower overnight. At 8:30 Durable goods orders were reportedly higher: +3.0% v +1.9%, as were Jobless claims: 496K v 474K. Just before the open the FED was reported investigating GS in relation to its involvement with Greece: http://www.marketwatch.com/story/bernanke-probing-goldmans-dealings-with-greece-2010-02-25?siteid=bnbh. The market gapped down at the open to SPX 1095, it had closed at 1105 yesterday. In the first few minutes it continued lower to SPX 1086. That was the low for the day. After hitting the lows, on a short term positive divergence, the market bounced to 1091 by 11:00. Around this time the testimony by FED counsel Alvarez was released: http://www.federalreserve.gov/newsevents/testimony/alvarez20100225a.htm. Another pullback followed to 1087 by 12:00, and then the market rallied to 1104 nearing the close. Just after 3:00 the FED issued the following press release: http://www.federalreserve.gov/newsevents/press/other/20100225a.htm.
For the day the SPX/DOW were -0.35%, and the NDX/NAZ were mixed. Bonds were up 17 ticks, Crude dropped $1.75, Gold rallied $9.00 and the USD was lower. Support for the SPX remains at 1090 and then 1061, with resistance at 1107 and then 1133. Short term momentum displayed a positive divergence at today’s lows and then turned higher. Tomorrow, first Q4 GDP revision at 8:30. At 9:00 FED governor Duke testifies before Congress on small business lending. Then the Chicago PMI at 9:45. Plus at 10:00 Consumer sentiment and Existing home sales. Later at 1:30, FED governor Tarullo heads a panel discussion on financial regulation in NYC.
The gap down opening this morning, and retest of the OEW 1090 pivot, set up a positive short term divergence between the two recent lows. Again the 1090 pivot held support and the market rallied for the rest of the day. Yet, at the close the market remained in between the 1090 and 1107 pivot. Exactly where it has remained since Feb 16th. With only one trading day left in February it appears this month will end in the positive, +2.7% so far. Lots of interesting economic reports tomorrow. Best to your trading!
MEDIUM TERM: downtrend remains at inflection point
LONG TERM: bear/bull market inflection point