SHORT TERM: welcome to Primary wave III, DOW +208
Overnight the Asian markets were all higher. Europe opened higher and closed +2.50%. US index futures were higher overnight as well. At the open the market gapped up to SPX 1112 and continued to rally. It had closed at SPX 1102 on friday. Around 10:00 Construction spending was reported slightly positive: +0.1% v -0.2%, and ISM manufacturing was reported positive but lower: 55.5% v 56.2%. The rally continued. At 10:00 FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20100802a.htm. The market continued to rise until around 11:30 when the SPX hit 1124, a new high for the rally. Then for the next hour or so the market drifted down to SPX 1120, found support around 1:00, and started to rally again. Around 3:30 the SPX hit 1127 and then eased back to close at SPX 1126.
For the day the SPX/DOW were +2.10%, and the NDX/NAZ were +1.85%. Bonds lost 12 ticks, Crude rallied $2.50, Gold was flat, and the USD was lower. Support for the SPX notches up to 1107 and then 1090, with resistance at 1136 and then 1146. Short term momentum rose to overbought during the day. Tomorrow, Personal income/spending plus PCE prices at 8:30, then Factory orders and Pending home sales at 10:00. In the afternoon monthly Auto sales.
The market gapped up this morning, on overnight buying, and cleared the OEW 1107 pivot within the opening minutes. This rally from friday’s low at SPX 1088 continued higher, clearing the uptrend high at SPX 1121 by 10:30, paused for a couple of hours and then moved higher yet again. As expected, major US indices have confirmed this uptrend, from the early July SPX 1011 Primary wave II low, in the early part of this week. The first day. We continue to count this rally/uptrend as Major wave 1 of Primary wave III of the ongoing bull market from the Mar 09 SPX 667 bear market low. The count posted on the SPX chart has now been upgraded from tentative green labeling to the appropriate colors/wave degrees. We continue to count this now confirmed uptrend as posted on the SPX/DOW hourly charts. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market