thursday update

SHORT TERM: end of month – end of quarter, DOW +153

Overnight the Asian markets were all higher. Europe opened higher and closed +0.85%. US index futures were higher overnight. At 8:30 weekly Jobless claims again were reported flat: 428K vs 429K. The market gapped up at the open to SPX 1312. The SPX had closed at 1307 yesterday. After a dip to SPX 1310 the market started to rally again. At 9:45 the Chicago PMI was reported higher: 61.1 vs 56.6. At 11:00 the FED released the following: http://www.federalreserve.gov/newsevents/press/other/20110630a.htm. Then at 12:00 the FED released this:  http://www.federalreserve.gov/newsevents/press/bcreg/20110630a.htm. Around this time the SPX hit 1321 and then began to pullback. At 3:00 the SPX hit 1317 and then rallied in the last hour of trading. Nearing the close the SPX hit 1322 and closed at 1321.

For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +1.30%. Bonds lost 19 ticks, Crude gained 25 cents, Gold retreated $11.00, and the USD was lower. SPX support jumps to 1313 and then 1303, with resistance now at 1361 and then 1372. Short term momentum still in overbought territory. Tomorrow around 10:00, Consumer sentiment, ISM manufacturing and Construction spending. Then in the afternoon Auto sales.

The rally continued today, but this time with a gap up opening – the first one since the rally began on thursday of last week. Quite a good showing coming off an oversold and quite pessimistic low. Around noon today the SPX cleared the 1313 OEW pivot range, pulled back some, and then rallied and closed above it. The close above the 1313 pivot, and the pivot range, is quite positive and exactly what we mentioned was required to get an uptrend going. It certainly looks like the low is in and an uptrend confirmation appears imminent. Short term support is now at the 1313/1303 pivots, with resistance at SPX 1345 then the 1363/1372 pivots. The market remains quite overbought, a sizeable pullback can occur at any time. Remember the DOW has the preferred SPX count. Best to your trading!

MEDIUM TERM: downtrend may have ended, low SPX 1258

LONG TERM: bull market

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