friday update

SHORT TERM: early pullback – mixed close, DOW +8

Overnight the Asian markets were mostly higher. Europe opened higher, but closed -1.20%. US index futures were lower overnight and the market opened lower at SPX 1257. The SPX had closed at 1258 yesterday. Within the first few minutes the market pulled back to SPX 1254, setting up a slight short term positive divergence. For the rest of the day the market tried to rally. By noon it had reached SPX 1259 and then lingered around that level until the last hour of trading. Nearing the close the SPX dipped a few points and then recovered to end the day, week, month, and year at SPX 1258.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.35%. Bonds were up 12 ticks, Crude rallied $1.60, Gold rose $15.00, and the USD was lower. Support for the SPX remains at 1240 and then 1222, with resistance at 1261 and then 1291. Short term momentum displayed a slight positive divergence at todays lows and moved higher. Last night the FED reported the Monetary base had declined some, and today the WLEI rose to an economic expanding 52.2% vs 50.8%.

This morning’s decline to SPX 1254 generated the largest pullback in two weeks: 9 SPX points, (1263-1254). This fits with the short term wave pattern we have been following. The recent high at SPX 1263 may have been Minute wave one of Minor wave 3. And, today’s low Minute wave two of Minor wave 3. This would suggest a rally into next week as Minute wave three of Minor wave 3 unfolds. Short term OEW charts remain positive after this morning’s test of short term support in the mid-1250’s, and the lower end of the 1261 pivot range. The market could pullback a bit more since Minute wave one was 30 points and the pullback only 9 points. Should the SPX test the OEW 1240 pivot then the short term count becomes questionable. A close over the OEW 1261 pivot and the market should move higher. Enjoy the holiday weekend!

Happy New Year everyone, and thank you for being part of our daily public blog.   

MEDIUM TERM: uptrend high SPX 1263

LONG TERM: bull market

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