SHORT TERM: no gap opening but big rally, DOW +175
Overnight the Asian markets lost 0.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight, and at 8:30 Durable goods orders were reported lower: -5.2% vs +4.3%. The market opened 1 point below yesterday’s SPX 1497 close, dipped to 1495, and then started to rally. At 10:00 FED chairman Bernanke presented his report to Congress, and Pending home sales were reported higher: +4.5% vs -4.3%. The rally continued into the afternoon with just two pullbacks of 4 and 3 points. At 3:30 the SPX hit 1520, then pulled back to close at 1516.
For the day the SPX/DOW were +1.25%, and the NDX/NAZ were +1.05%. Bonds lost 2 ticks, Crude added 20 cents, Gold dropped $16, and the USD was lower. Medium term support jumps to the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots. Tomorrow: Q4 GDP (est. +0.5%), and weekly Jobless claims at 8:30. Then at 9:45 the Chicago PMI, and a speech from FED governor Raskin at 12:30.
The market opened slightly lower today then had its best rally since early January. After the short term trend turned positive yesterday at SPX 1495, the market has continued to rally without even one 5 point pullback. In fact, from the SPX 1485 low the market has rallied 35 points without a 5 point pullback. Quite a powerful surge. Minor wave 4 looks to have bottomed at that low and Minor wave 5 has been underway. Our weekend targets of the 1552 and 1576 pivots remain. But, with Q4 GDP tomorrow and the DOW already at new highs, it may be an uptrend negative if the SPX drops to 1500 again.
Short term support now jumps to the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term momentum has risen from a positive divergence to extremely overbought today. The short term OEW charts turned positive in the morning with the reversal level now around SPX 1509. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market