SHORT TERM: volatile day to start the week, DOW +106
Overnight the Asian markets gained 1.0%, but declined -0.4% on Monday. European markets opened higher, gained 1.4% after gaining 1.0% on Monday. US index futures were quite a bit higher overnight. At 9:00 Case-Shiller reported higher housing prices: +10.9% vs. +9.3%. The market gapped up at the open to SPX 1661 and continued to rally. The SPX had closed at 1650 on Friday. At 10:00 Consumer confidence was reported higher: 76.2 vs. 68.1. The rally continued until about 10:30 when the SPX hit 1674. Then the market started to pullback. After a fairly large pullback to SPX 1655 by 2:30, the market bounced to 1663 by 3:30. Then pulled back to end this volatile day at SPX 1660.
For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.80%. Bonds lost 38 ticks, Crude gained 95 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Nothing on the economic schedule tomorrow.
The market gapped up this morning for the first time since May 17th. That gap up also started after a SPX 1650 close the previous trading day. The rally continued to SPX 1674, then was followed by a big pullback to 1655. Nothing like a little excitement to start the trading week. With the opening rally above SPX 1653 the SPX turned short term positive. We marked the SPX 1637 low as the end of Minute wave iv of Minor 5. Now we are expecting Minute wave v to rally the market to new highs. The first target would be the recent SPX 1687 high, then the OEW 1699 pivot. Any drop below SPX 1636 would suggest Minute v failed at 1674.
Short term support is at the 1628 and 1614 pivots, with resistance at the SPX 1658-1667 zone and the 1680 pivot. Short term momentum was quite overbought at today’s high, then dropped to neutral during the pullback. The short term OEW charts are now positive with the reversal level around SPX 1655. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market