SHORT TERM: market rallies again, DOW +78
Overnight the Asian markets gained 0.7%. Europe opened lower but gained 1.1%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported lower: 334K vs 360K. The market opened three points above yesterday’s SPX 1681 close and continued to rally. At 10:00 Leading indicators were reported flat: 0.0% vs +0.1%, and the Philly FED was reported higher: 19.8 vs 12.5. The rally continued until 11:00 when the SPX hit a new all time high at 1693. Then it started to pullback. At 1:00 the SPX hit 1687, bounced to 1692 by 2:30, dipped to 1688 by 3:30, and then rose to close at 1689.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were mixed. Bonds lost 12 ticks, Crude rose $1.50, Gold rallied $7, and the USD was higher. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow is Options expiration Friday.
The market opened higher today, rallied past SPX 1685 eliminating the ongoing Minor wave 4 scenario, and rallied into the OEW 1699 pivot range. Our minimum uptrend targets for Minor 3 (1680 pivot), and Minor 5 (1699 pivot), have been met. Right now, just as we expected when this uptrend began, the market either tops in July at the 1699 pivot. Or, extends into August and possibly reaching the 1779 pivot. The next several days should be the determining factor.
Currently we can count five waves up from SPX 1560: 1627-1605-1685-1672-1693 so far. This count would satisfy the five Minor wave uptrend to complete Int. wave v and Major wave 3. We are going to carry this count on the SPX charts. We can also count two Minor waves completed from SPX 1560 and a Minor wave 3 still ongoing: 1627-1605, then 1627-1615-1693 so far. This count would suggest the uptrend will extend into August, and will be carried on the DOW charts. Our immediate concerns are the negative divergences on every timeframe at the current highs, and the weakness of most fifth waves during this bull market. With this in mind we give the two potential scenarios a 50-50 probability.
Short term support remains at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 and 1779 pivots. Short term momentum is displaying a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1670. Best to your trading on OPEX day.
MEDIUM TERM: uptrend
LONG TERM: bull market