SHORT TERM: market gaps up again, DOW +150
Overnight the Asian markets gained 0.3%. Europe opened lower but gained 1.6%. US index futures were lower, then higher overnight. At 8:30 Q1 GDP was reported lower than expected at +1.8% vs +2.4%. The market gapped up at the open to SPX 1596 and hit 1604 in the opening minutes. After that surge the market pulled back to SPX 1595 by 11:00, and then began to move higher again. Around 3:00 the SPX hit 1607, then pulled back to 1603 to end the day.
For the day the SPX/DOW were +1.00%, and the NDX/NAZ were +0.90%. Bonds gained 14 ticks, Crude added 10 cents, Gold fell $51, and the USD was higher. Medium term support remains at the 1576 and 1552 pivots, with resistance at the 1614 and 1628 pivots. Last night the FED reported Medium home prices declined: $263.9K vs $277.6K. Tomorrow: weekly Jobless claims, Personal income/spending, and PCE prices at 8:30, then Pending home sales at 10:00. Also there is a speech from FED governor Powell at 10:30 about non-conventional monetary policy.
The market gapped up at the open today, cleared short term resistance at SPX 1598-1599, and rallied to 1607 entering the OEW 1614 pivot zone. This impulsive rally from Monday’s SPX 1560 low suggests Intermediate wave v is underway. Thus far we can count three waves up from the SPX 1560 low: 1586-1573-1607, with the third wave dividing into five waves. This three wave structure should be part of a five wave Minor 1. A review of the charts suggests Minor wave 1 should reach the 1628 pivot before a Minor wave 2 pullback.
Short term support is now at SPX 1593-1599 and the 1576 pivot, with resistance at the 1614 and 1628 pivots. Short term momentum is starting to display a negative divergence at today’s highs. The short term OEW charts ended the day neutral with the swing level at SPX 1603. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market