SHORT TERM: gap up and go, DOW +141
Overnight the Asian markets gained 1.5%. European markets opened higher but closed mixed. US index futures were higher overnight, and the market gapped up at the open to SPX 1662. The SPX had closed at 1655 on Friday. By 10:00 the SPX hit 1666, pulled back to 1662 by 10:30, and started to move higher again. Around 2:30 the SPX hit 1672 and then closed there.
For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +1.20%. Bonds gained 11 ticks, Crude $1.50, Gold slipped $2, and the USD was lower. Medium term support remains at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots. Nothing on the economic agenda tomorrow.
The market gapped up at the open today for the third time in five trading days. By 10:00 the SPX had hit a slightly higher Int. wave B high at 1666. Then after a small pullback the rally move even higher. With today’s rally clearing the SPX 1658-1667 resistance zone it would appear the OEW 1680 pivot range is next (1673-1687). Negative divergences remain on the short term charts and the daily charts are now overbought. As a reminder we posted this over the weekend:
Short term resistance is at SPX 1658-1667 and the 1680 pivot range. The rally hit the lower range on Friday. Fifty percent and 61.8% Fibonacci retracements of Int. wave A suggest SPX: 1669 and 1678. Again just about the same ranges. The Minor fourth wave of Int. wave A was at SPX 1670. So all indications are that Intermediate wave B should be topping out soon.
Short term support now rises to SPX 1658-1667 and SPX 1648-1649, with reistance at the 1680 and 1699 pivots. Short term momentum continues to display a negative divergence. The short term OEW charts are positive with the reversal level now SPX 1655. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market