SHORT TERM: market gaps up again, DOW +188
Last night the FED reported an increase in the monetary base: $2.94 tln vs $2.65 tln, and an increase in the M1 multiplier to 0.868. Overnight the Asian markets gained 1.5%. Europe opened higher and gained 1.7%. At 8:30 Q2 GDP was reported lower: +1.5% vs +1.9%, but beat lowered +1.2% expectations. The market gapped up at the open to SPX 1365 and continued to rally. At 10:00 Consumer sentiment was reported higher: 72.3 vs 72.0. At 12:00 the FED released the following: http://www.federalreserve.gov/newsevents/press/bcreg/20120727a.htm. The market continued to rally, with only one 3 point pullback, to SPX 1388 by 1:30. Then with the market extremely overbought it started to pullback. At 2:30 the SPX hit 1383, then rallied to 1389 by 3:30. A pullback into the closed ended the week at SPX 1386.
For the day the SPX/DOW were +1.70%, and the NDX/NAZ were +2.30%. Bonds lost 27 ticks, Crude gained 75 cents, Gold added $10, and the USD was lower. Medium term support for the SPX jumps to the 1372 and 1363 pivots, with resistance now at the 1386 and 1440 pivots. Today the WLEI was reported higher again: 48.4% vs 48.1%.
The market gapped up this morning and just kept on going. ECB president Draghi’s bullish EUR comments were apparently the catalyst the market was awaiting. Early in the day the DOW crossed 13,000, a new uptrend high, then the SPX crossed its uptrend high at 1380. The 2-year cycle low in Techs appears to be behind us as well. The SOX index is getting close to confirming an uptrend. Once this occurs, Techs should lead for the rest of this uptrend. We added FB and SBUX to the public charts today. No, we still do not like FB. We’ll update everything in the weekend update. Best to yours!
MEDIUM TERM: choppy uptrend makes new highs
LONG TERM: bull market