monday update

SHORT TERM: quite a mixed market today, DOW +1

Overnight the Asian markets were mostly higher. Europe opened higher and closed +0.85%. US index futures were also higher overnight but the market opened flat at SPX 1217. Within the first few minutes the SPX rallied to a new uptrend high at 1220. It then dipped to 1215 by 10:30 and rallied back to 1220 by 11:00. For the rest of the day it traded between 1215 and that 1220 high until the last hour of trading. In the last hour the SPX slipped to 1211 and then closed at 1212.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.30%. Bonds were up 6 ticks, Crude dropped $1.20, Gold lost $1.00, and the USD was higher. Support for the SPX remains at 1187 and then 1176, with resistance at 1222 and then 1240. Short term momentum was extremely overbought in the morning and then dropped below neutral during the day. Tomorrow, the two day FOMC meeting begins, FED chairman Bernanke gives Congressional testimony at 10:00, and the monthly Consumer confidence reading will also be released at 10:00.

Today’s rally to SPX 1220 appears to have ended the short term rally from thursday’s low at SPX 1190. Short term market momentum was extremely overbought and has turned lower. This could have completed a small wave three from the Minute wave four low at SPX 1184 last monday. This count suggests: wave 1 SPX 1211, wave 2 SPX 1190, wave 3 SPX 1220 and wave 4 underway now. If we get some overlap soon this last rally could be forming a diagonal triangle. In either case, we could get one more push to new uptrend highs. With the OEW 1222 pivot just overhead, and a 0.618 fibonacci relationship right at these levels, this should be a tough resistance area to crack. Best to your trading!   

MEDIUM TERM: uptrend makes new high at SPX 1220

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987