SHORT TERM: consolidation day, DOW +33
Overnight the Asian markets gained 1.2%. Europe opened higher and closed +0.6%. US index futures were higher overnight as well. At 9:00 Case-Shiller reported a 0.6% month over month decline in housing prices after a five month 3.8% gain. The market opened slightly higher at SPX 1194, dipped to 1192, then resumed yesterday’s rally. At 10:00 Consumer confidence was questionably reported higher: 56.0 vs 39.8, and FHFA housing prices were reported higher: +0.9% vs -0.1%. The market continued to rally until about 10:30 when it hit SPX 1204. Then from short term overbought levels it started to pullback. After a drop to SPX 1198 by 11:00, and a bounce to 1203 by 11:30, the market pulled back further. Also at 11:30 FED vice chiar Yellen’s speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20111129a.htm. The pullback continued until 2:00 when the SPX hit 1193, yesterday’s close. It then rallied to SPX 1201 by 3:00 and pulled back to 1195 to end the day.
For the day the SPX/DOW were +0.25%, and the NDx/NAZ were -0.50%. Bonds lost 8 ticks, Crude rallied $1.60, Gold added $2.00, and the USD was lower. Support for the SPX remains at 1187 and then 1176, with resistance at 1222 and then 1240. Short term momentum hit overbought and pulled back to neutral. Tomorrow, the ADP index will be released at 8:15, the Chicago PMI and Pending home sales around 10:00, then the FED’s beige book at 2:00.
The market continued its rally today hitting SPX 1204. A 45 point rally, 3.9%, in two days. This morning we added a potential short term count on the DOW charts, suggesting the contracting triangle formation many observed in mid-Nov between SPX 1227 and 1278 may still be in play. If it is, that triangle could be counted as a Minor B, and the recent low at SPX 1159 could have ended a Minor wave C. If the market holds the recent low in coming weeks this is probably the count. If not, the count we have been tracking: Minor A-B and Minute i-ii-iii with iv underway is still in play. Short term support and resistance levels are the same are yesterday. Best to your trading!
MEDIUM TERM: awaiting downtrend confirmation
LONG TERM: neutral