SHORT TERM: consolidation day, DOW -7
Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.5%. US index futures were relatively flat overnight, and at 8:30 Housing started were reported higher: 894K vs 872K, but Building permits were lower: 866K vs 894K. The market opened lower at SPX 1384 and pulled back to 1381 in the first few minutes. The SPX had closed at 1387 yesterday. After the pullback the market rose to a new rally high at SPX 1390 by noon. Then right after that high FED chairman Bernanke’s speech was released: http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm, and the FED released: http://www.federalreserve.gov/newsevents/press/bcreg/20121120a.htm. The market continued to pullback, and by 1:30 hit SPX 1377. Then it reversed and rallied to SPX 1388 by the close.
For the day the SPX/DOW were mixed, and the NDX/NAZ were mixed. Bonds lost 12 ticks, Crude dropped $2.20, Gold slipped $4, and the USD was slightly lower. Medium term support remains at the 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: weekly Jobless claims at 8:30, then Consumer sentiment and Leading indicators at 10:00.
The market opened slightly lower today, had its first five point pullback since SPX 1351, then rose to a new rally high at 1390. At the high the market was quite-extremely overbought, and then it had its first significant pullback from SPX 1351. The rally from friday’s SPX 1343 low has thus far unfolded impulsively: 1361-1351-1390-1377(?). If the market hits SPX 1390 again, or higher, we will have had five waves up from the low.
Short term support remains at the 1386 and 1372 pivots, with resistance at SPX 1396/98 and 1402/03. Short term momentum dropped to neutral after hitting extremely overbought, then ended the day rising. The short term OEW charts remain positive with the swing point now around 1379. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market