SHORT TERM: gap up opening then volatile day, DOW +116
Overnight the Asian markets lost 1.7%. Europe opened lower and lost 2.1%. US index futures were higher overnight, and at 9:00 Case-Shiller was reported higher: +6.8% vs +5.5%, and the FHFA housing index was reported higher: +0.6% vs +0.6%. The market gapped up at the open, for the third day in a row, opening at SPX 1494 and rising to 1498 by 10:00. At 10:00 FED chairman Bernanke offered his report to the senate: http://www.federalreserve.gov/newsevents/testimony/bernanke20130226a.htm. Also at 10:00 New home sales were reported higher: 437K vs 369K, and Consumer confidence was reported higher: 69.0 vs 58.6. The market soon after headed lower, hitting SPX 1488 by 10:30, bouncing to 1494 by 11:00, and then declining to 1485 by 12:00. With the chairman’s testimony over, and the european markets closed the market started to rally. Nearing the close the SPX hit 1499, then closed at 1497.
For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.45%. Bonds gained 4 ticks, Crude slipped 50 cents, Gold rallied $19, and the USD was higher. Medium term support remains at the 1440 and and 1386 pivots, with resistance at the 1499 and 1523 pivots. Tomorrow: Durable goods orders at 8:30, Pending homes sales at 10:00, and FED chairman Bernanke reports to Congress at 10:00.
Another gap up opening continued four trading days of volatility since the market closed at SPX 1531 last wednesday. Since then the market has declined to SPX 1497, rallied to 1526, and now declined to 1485 today. On the surface this looks like an ABC zigzag Minor wave 4. The previous two Minor 4’s took between 4 and 8 days, had extreme oversold hourly RSI’s and oversold daily RSI’s. This pullback fits those characteristics. Also this last decline had a consecutive string of lower highs/lows (1519-1514-1507-1499-1494) until this afternoon’s rally. Still carrying the Minor 4 labeling on the SPX charts.
Short term support is at SPX 1471/75 and 1463/64, with resistance at the 1499 and 1523 pivots. Short term momentum continues to display a positive divergence. The short term OEW charts remain negative with the reversal level now at SPX 1509. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market