SHORT TERM: rebound continues, DOW +71
Overnight the Asian markets rallied: +1.7%. European markets opened higher and also rallied: +2.1%. US index futures were higher overnight as well. At 8:30 weekly Jobless claims were reported higher: 362K vs 351K. The market gapped up at the open to SPX 1361, edged higher to 1363 in the opening minutes, then pulled back to 1358 by 10:00. After that the market rallied again. At 12:30 the FED released the flow of funds: http://www.federalreserve.gov/releases/z1/current/. By 1:00 the SPX hit 1366, pulled back ot 1364 by 2:30, then turned higher. Around 2:30 the FED released this: http://www.federalreserve.gov/newsevents/press/enforcement/20120308b.htm. Just past 3:00 the SPX hit 1369, then pulled back to close at 1366.
For the day the SPX/DOW were +0.75%, and the NDX/NAZ were +1.15%. Bonds lost 11 ticks, Crude added 55 cents, Gold rallied $16, and the USD was lower. Support for the SPX moves up to the 1363 and 1313 pivots, with resistance now at the 1372 and 1386 pivots. Short term momentum hit extremely overbought during today’s rally. Tomorrow, the monthly Payrolls report at 8:30, along with the Trade deficit. Then at 10:00 Wholesale inventories.
A somewhat surprising strong rally today, worldwide, considering the recent downtrend confirmations in half the international indices and an uptrend confirmation in the USD. After the small three wave decline from SPX 1378 to 1340, (1364-1376-1340), which we labeled Minute wave A, we expected some sort of rebound. SPX 1365 would have sufficed, overlapping the first decline at SPX 1364. Yet the market continued on to SPX 1369. However, during the Major wave 2 downtrend the market rebounded 81%, after the first decline, before heading lower again. That kind of rebound would put our current market at SPX 1371 before it rolls over. Should this market rallied beyond that, then the alternate DOW count may be in play. This market appears risky in either direction at this point.
Short term support is at the 1363 pivot, the low SPX 1350’s and then 1340. Overhead resistance is at the 1372 and 1386 pivots. Short term momentum hit extremely overbought today then backed off some. The short term OEW charts have just swung positive with support around 1360. Best to your trading!
MEDIUM TERM: uptrend probably topped at SPX 1378
LONG TERM: bull market