SHORT TERM: rally has been quite steady, DOW +73
Overnight the Asian markets were mixed. Europe opened higher and closed +1.60%. US index futures were higher overnight as well. Around 9:00 the FED made this press release: http://www.federalreserve.gov/newsevents/press/monetary/20110629a.htm. At the open the market moved higher to SPX 1301 and hit the 1303 pivot in the first few minutes. The SPX had closed at 1297 yesterday. After a pullback to SPX 1298 by 10:00 the rally resumed. Also at 10:00 Pending home sales were reported higher: +8.2% vs -11.6%. Around noon, with the SPX trading at 1308, FED governor Raskin’s speech was released: http://www.federalreserve.gov/newsevents/speech/raskin20110629a.htm. After hitting SPX 1309 around 1:00 the market pulled back to 1302 by 2:30. After that a bounce higher into a SPX 1307 close.
For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.40%. Bonds lost 17 ticks, Crude rallied $2.00, Gold added $11.00, and the USD was lower. Support for the SPX moves up to 1303 and then 1291, with resistance at 1313 and then 1363. Short term momentum is just coming off of extremely overbought. Tomorrow, weekly Jobless claims at 8:30 then the Chicago PMI around 9:45.
Another good rally today, techs lagged a bit but the financials rose nicely. The OEW 1291 pivot range was cleared at the open. The market then rallied above the 1303 pivot, and is now within the 1313 pivot range. This is exactly what a rally should look like coming off a downtrend low. The SPX count posted on the DOW hourly/daily charts appears to be the working count for the SPX/DOW. The NDX/NAZ, however, both appear to have completed an irregular flat from Feb-Jun, see their weekly charts. It does appear we will now have a split market in regard to the counts for the Techs and the Industrials.
As a reminder, our bellwether index for tracking the US is the DOW. The SPX and NDX are the trading indices. Should we get an uptrend confirmation soon it would be nearly impossible to count the DOW as having completed an irregular flat. The low, thus far, is a good 300 points above the low in March. With the SPX also failing to reach the March low (1258 vs 1249) it would make sense to keep these two indices with the Intermediate wave one and two count, and now entering Intermediate three of Major 3. Meanwhile the NDX/NAZ would be just beginning Major 3.
Should this market clear the 1313 pivot we’ll likely get new uptrend confirmations. For now short term support is at the 1303/1291 pivots, with resistance at the 1313 pivot and then SPX 1345. Remember, the count on the DOW hourly/daily charts is the working count now. Best to your trading!
MEDIUM TERM: downtrend may have bottomed at SPX 1258
LONG TERM: bull market