monday update

SHORT TERM: market gaps up at the open, DOW +272

Overnight the Asian markets were all lower for the third day in a row. Europe opened lower but closed +1.6%. US index futures were lower, then higher overnight. Around 9:15 FED governor Raskin’s speech was released: http://www.federalreserve.gov/newsevents/speech/raskin20110926a.htm. At the open the market gapped up to SPX 1148 but immediately began to pullback. The SPX had closed at 1136 on friday. At 10:00 New home sales were reported slightly lower: 295K vs 298K. Then around 10:30 the SPX hit its low for the day at 1131, closing the gap. Another rally followed to a slightly higher high at SPX 1151 by noon. Then a pullback to SPX 1138 by 1:30 was followed by another rally. Heading into the close the SPX hit 1164, then ticked down to end the day at 1163.

For the day the SPX/DOW were +2.45%, and the NDX/NAZ were +1.30%. Bonds lost 20 ticks, Crude gained $1.40, Gold dropped $43.00, and the USD was lower. Support for the SPX rises to 1146 and then 1136, with resistance at 1168 and then 1176. Short term momentum hit slightly overbought. Tomorrow, Case-Shiller at 9:00, then Consumer confidence at 10:00.

The market opened with a gap up today, closed the gap, and then continued to rally. The choppy, trading range, market from mid-August resumed. Short term OEW charts turned positive, as the FED has again put in another tradeable low. This bias should remain unless the SPX drops into the low 1150’s. Short term support is at the 1136/1146 pivot ranges, with resistance at the 1168/1176 pivot ranges. Things should clear up once we get an OEW trend confirmation. Best to your trading!

MEDIUM TERM: July downtrend likely continuing

LONG TERM: bear market highly probable

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