thursday update

SHORT TERM: market consolidates near rally highs, DOW -31

Overnight the Asian markets were mostly higher. Europe opened higher but closed -0.20%. US index futures were lower overnight. At 8:30 weekly jobless claims were reported slightly higher: 388K vs 382K. The market opened relatively unchanged at SPX 1328. After a small push to SPX 1329 the market pulled by to 1325 by 10:00. Around 10:00 the Chicago PMI was reported lower: 70.6 vs 71.2, and the volatile Factory orders were reported lower: -0.1% vs +3.1%. The market then tried to rally and hit SPX 1330 by 10:00, but rolled over again to touch 1325 by 11:30. Around this time the FED released this: http://www.federalreserve.gov/newsevents/press/bcreg/20110331a.htm. Then around noon FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20110331a.htm. The market rallied, but found SPX 1330 to be resistance again around 2:30, and then the market pulled back to close at SPX 1326.

For the day the SPX/DOW were -0.20%, and the NDX/NAZ were +0.15%. Bonds lost 8 ticks, Crude rallied $2.35, Gold jumped $13.00, and the USD was lower. Support for the SPX remains at 1313 and then 1303, with resistance at 1363 and then 1372. Short term momentum backed off to neutral after yesterday’s negative divergence. Tomorrow, the monthly Payrolls report at 8:30, ISM and Construction spending at 10:00, then monthly Auto sales in the afternoon.

This market has now rallied 83 points in a little over two weeks from the SPX 1249 low. The rallies have been impulsive, and the pullbacks have been limited to the teens. A few SPX sectors, plus the R2K are already in confirmed uptrends. The NYAD market breadth has already made new bull market highs. And, four of the Foreign markets we track are now uptrending. Looks like we’ll get a SPX/DOW uptrend confirmation within the next week. Shorter term, the market consolidated today after new rally highs yesterday. Not much of a pullback after that negative divergence. OEW charts remain positive with support at 1320 and then the 1313 and 1303 pivots. Resistance is at 1332, 1344 and then the 1363 pivot. Best to your trading!

MEDIUM TERM: downtrend likely bottomed

LONG TERM: bull market

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