SHORT TERM: gap up rally, DOW +126
Overnight the Asian markets gained 0.7%. European markets gained 1.1%. US index futures continued their holiday rally, and the market gapped up to SPX 1326 at the open. The SPX had closed at 1318 on friday. Prior to the open Case-Shiller reported a slight dip in housing prices: $134.10K vs $134.14K. Then at 10:00 Consumer confidence was reported lower: 64.9 vs 69.2. The rally continued until 10:30 when the SPX hit 1335, and hit quite overbought. After that the market started to pullback, and declined further after Europe closed. At 1:30 the SPX hit 1323 and then started to rally. Heading into the close the SPX hit 1333 and closed at 1332.
For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.20%. Bonds lost 2 ticks, Crude slipped 5 cents, Gold dropped $16, and the USD was lower. Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum hit quite overbought this morning then pulled back near neutral. Tomorrow, Pending home sales at 10:00.
The market gapped up at the open for the first time since May 10th today. The rally carried the SPX to 1335, its highest level since the 1292 low. This was followed by an 11 point pullback to 1323. Which was in the middle of the range of the recent 10 and 13 point pullbacks, and the previous SPX 1324/1328 resistance area. The advance from the SPX 1297 low, which is when the DOW bottomed, looks a bit choppy so far. Currently: 1324-1311-1324-1314-1335-1323. This pattern is fine as long as SPX 1335 is exceeded soon. Any pullback to the OEW 1313 pivot range (+/- 7 pts.), and it will start to look corrective.
Short term support is at SPX 1324/28 and the 1313 pivot, with resistance at SPX 1342/47 and the 1363 pivot. Short term momentum looks positive as the pullbacks have all ended around neutral. The short term OEW charts are positive after the market rallied through the 1323 level on friday. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market