SHORT TERM: market rebounds, DOW +68
Overnight the Asian markets were mostly lower. Europe opened lower and closed -0.35%. US index futures opened sharply lower overnight but turned higher nearing the open. At 8:30 Personal income was reported positive: +0.4% vs +0.3%, Personal spending was reported positive: +0.7% vs +0.4%, and PCE prices remained out of negative territory: +0.0% vs +0.1%. The market opened higher at SPX 1280. It had closed at SPX 1276 on friday. In the opening minutes the SPX bounced to 1282 and then started to pullback. At 9:45 the Chicago PMI was reported higher: 68.8 vs 68.6. The pullback continued until about 10:00 when the SPX hit 1277. That was the low for the day. From an extremely oversold short term condition the market started to rally. Around noon the FED issued the following: http://www.federalreserve.gov/newsevents/press/bcreg/20110131a.htm. About 12:30 the SPX hit 1287 and began to pullback. At 2:00 the FED issued this report: http://www.federalreserve.gov/boarddocs/snloansurvey/201102/default.htm. The pullback ended around 3:00 at SPX 1281, and then the market rallied to close at 1286.
For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.50%. Bonds lost 12 ticks, Crude rallied $2.65, Gold slipped $3.00, and the USD was lower. Support for the SPX remains at 1261 and then 1240, with resistance at 1291 and 1303. Short term momentum turned higher after an extremely oversold condition. Tomorrow, Construction spending and ISM manufacturing at 10:00, then monthly Auto sales in the afternoon.
Last night futures trading started like the market was going to selloff today. After a hour of selling the futures market began to recover and was up for the day heading into the open. On friday the SPX was extremely oversold and was due for a bounce. That bounce occurred today. But the market had trouble when it hit resistance on the short term OEW charts at SPX 1287. Thus far the SPX has declined 28 points off the 1303 uptrend high and retraced 12 points of that decline. Meanwhile short term momentum has recovered from extremely oversold to neutral. Overhead resistance remains at the 1291 pivot and short term at SPX 1287, short term support is now at 1275 and then the 1261 pivot. Best to your trading!
MEDIUM TERM: uptrend under pressure
LONG TERM: bull market