SHORT TERM: SPX climbs over 1168 pivot again, DOW +46
Overnight most of the Asian markets were higher. Europe opened higher and closed +0.40%. US index futures were also higher overnight. At 8:30 Personal income was reported flat: +0.0% v +0.3%, Personal spending stayed positive +0.3% v +0.4%, and core PCE prices remained flat: +0.0% v +0.0%. The market opened slightly higher and traded up to SPX 1174 by 10:00. A small pullback to SPX 1168 followed by 10:30 then the market hit 1175 an hour later. Heading into the afternoon the market stayed in a even narrower range, trading between 1171 and 1174 for the rest of the day, and closed at SPX 1173.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.40%. Bonds were off 3 ticks, Crude rallied $2.45, Gold gained $6.00, and the USD was lower. Support for the SPX notches back up for the second time to 1168 and then 1146, with resistance at 1176 and then 1187. Short term momentum is nearing overbought after hitting oversold on friday. Tomorrow, Case-Shiller home prices at 9:00, then Consumer confidence at 10:00.
While we were expecting the pullback from SPX 1181 to 1161 continue, once the OEW 1168 range was broken, and it still may. The market had other ideas in overnight trading as the Asian markets rallied. With today’s rally the short term trend can again be considered up. This, however, can change quite quickly especially after the market gets overbought. After the first two hours of trading (SPX 1168-1175) today the market did very little afterwards in another one of those narrow range days. What was interesting on the day was the rallies in Crude (+2.5%), Silver (+2.5%) and the Commodity index (+2.2%) while Gold was held relatively flat. Since Silver typically leads Gold during uptrends and is a good leading indicator for the precious metals, today’s action was quite unusual. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market