tuesday update

SHORT TERM: investors await LTRO 2 results, DOW +24

Overnight the Asian markets were higher: gaining 1.4%. Europe opened higher and gained 0.4%. US index futures were also higher overnight. At 8:15 FED governor Duke’s testimony: http://www.federalreserve.gov/newsevents/testimony/duke20120228a.htm. At 8:30 Durable goods orders were reported lower: -4.0% vs +3.0%. Then at 9:00 Case-Shiller housing prices reported a new low: 136.71 vs 138.24. Then previous low was 137.64. The market shrugged off the news and opened about unchanged at SPX 1368. After a two point dip in the opening minutes the market tried to rally. At 10:00 Consumer confidence reportedly surged: 70.8 vs 61.1. The market continued higher and hit a marginal new uptrend high at SPX 1373 around 11:30. Then it started to pullback. At 2:30 the SPX had dipped 5 points to 1368, and then it moved higher into a 1372 close.

For the day the SPX/DOW were +0.25%, and the NDX/NAZ were +0.85%. Bonds gained 1 tick, Crude lost $1.90, Gold rallied $18, and the USD was lower. Support for the SPX rises to the 1372 and 1363 pivots, with resistance now at the 1386 and 1440 pivots. Short term momentum tagged slightly overbought before the pullback. Tomorrow, Q4 GDP at 8:30, the Chicago PMI at 9:45, then the FED’s beige book at 2:00. Also, FED chairman Bernanke testifies before Congress on monetary policy. With the results of the ECB’s LTRO expected to be announced, tomorrow could create a breakout or begin a downtrend.

The market opened flat today, eked out another uptrend high, and then went into consolidation mode. It appears investors/traders are awaiting tomorrow’s LTRO results, Q4 GDP, and Bernanke’s semi-annual testimony on monetary policy. Estimates for the LTRO are anywhere from $300 bln to $700 bln Euros. Q4 estimates are at +2.8%. Short term the market is set up to go either way. There is a potential diagonal triangle forming for Micro wave 5, or a series of nested 1-2’s. We should know which path the market will take in the next day or so.

Short term support is at the 1372 and 1363 pivots, and then SPX 1352 and 1341. Overhead resistance is at the 1386 and 1440 pivots. Short term momentum is rising after dipping to neutral during today’s small pullback. The short term OEW charts remain positive with support at the 1363 pivot. Should the market clear the OEW 1386 pivot, then next one is not until 1440. Should the market drop below SPX 1352 a downtrend is likely underway. Best to your trading!

MEDIUM TERM: uptrend high SPX 1373

LONG TERM: bull market

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