SHORT TERM: oversold market rally, DOW +100
Overnight the Asian markets ended mixed. Europe opened lower and lost 0.1%. US index futures were higher overnight, and at 8:30 the NY FED was reported still in contraction mode: -8.1 vs -5.2. The market opened higher at SPX 1418 and continued to rally. The SPX had closed at 1414 on friday. The rally continued until just past 10:00, when the SPX hit 1424. Then after a small pullback to SPX 1420 by 10:30 the rally resumed. At 11:00 FED governor Stein’s speech was released: http://www.federalreserve.gov/newsevents/speech/stein20121217a.htm. Around 12:30 the SPX hit 1428, then started to pullback again. At 2:30 the FED released this: http://www.federalreserve.gov/newsevents/press/bcreg/20121217a.htm. Around that time the pullback hit SPX 1422, and the rally resumed. Heading into the close the SPX hit 1431, then ended the day at 1430.
For the day the SPX/DOW were +1.00%, and the NDX/NAZ were +1.35%. Bonds lost 16 ticks, Crude rallied 70 cents, Gold added $3, and the USD was flat. Medium term support remains at the OEW 1386 and 1372 pivots, with resistance at the 1440 and 1499 pivots. Tomorrow: the Current account balance at 8:30, then the NAHB housing index at 10:00.
The market opened higher today, off the slight positive divergence setup on friday, and worked its way higher throughout the day. This morning, after the SPX had reached 1422 we placed a tentative green Minute wave ii label at friday’s SPX 1412 low. The market looks like it is now in: Minute wave iii of Minor 3. Or, from the alternate bearish perspective: Minor 3 of Intermediate wave C. In either case, the market should re-enter the inflection range (SPX 1434-1462) shortly. Then, eventually, make its final inflection point decision: bull or bear into 2013. Nothing like market drama as we approach the year end holidays, and of course, the 2012 Winter Solstice.
Short term support jumps to SPX 1422/27 and 1413/16, with resistance at the 1440 pivot and SPX 1463/64. Short term momentum is currently overbought. The short term OEW charts turned positive this morning once the SPX passed 1420 the current swing level. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull/bear inflection range