SHORT TERM: market consolidates after recent rally, DOW +12
Overnight the Asian markets were mixed. Europe opened higher and closed +0.25%. US index futures were higher overnight, and at 9:00 the Case-Shiller index was reported rising: +4.6% v +3.8%. The market opened higher and rallied to SPX 1121 in the opening minutes. That was the high for the day and a new high for the rally from SPX 1011. With an extremely overbought short term condition the market started to pullback. At 10:00 Consumer confidence was reported waning: 50.4% v 52.9%. The pullback continued until about 11:30 when the SPX hit 1110. Another rally attempt followed but the SPX could only reach 1116 by 12:00. By 1:30 the SPX had pulled back to a higher low at 1111, rallied again to 1116 by 3:30, and then ended the day at SPX 1114.
For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.20%. Bonds lost 14 ticks, Crude slid $1.55, Gold dropped $24.00, and the USD was higher. Support for the SPX remains at 1107 and then 1090, with resistance at 1136 and then 1146. Short term momentum was extremely overbought this morning and dropped below overbought during the day. Tomorrow, Durable goods orders at 8:30, then the FED’s Beige book at 2:00.
Today’s opening rally took the SPX to it highest level since the rally began earlier this month. In the 3+ weeks since the SPX 1011 low, the market has rallied 110 points to SPX 1121 or nearly 11%. The DOW is the first of the four major US indices to confirm an uptrend. We’re expecting the other three to follow shortly. Currently 6 of the 13 foreign indices we follow are in confirmed uptrends. And,5 of the 9 SPX sectors are in confirmed uptrends along with the NYAD, NYA and TRAN. It certainly appears the two "buy" signals the market generated over the past few weeks, which usually precede uptrend confirmations, will be spot on again. Short term OEW charts remain positive and impulsing. We continue to count this advance as Intermediate wave one (SPX 1099) off the SPX 1011 low, and then Intermediate wave two (SPX 1057). From the SPX 1057 low, Intermediate wave three is underway with, Minor wave 1 (SPX 1089), Minor wave 2 (SPX 1065) and Minor wave 3 underway. Best to your trading!
FWIW, this is not a new format, hopefully. We have not made any changes.
MEDIUM TERM: DOW uptrending
LONG TERM: bull market