SHORT TERM: another gap up and go day, DOW +128
Overnight the Asian markets gained 2.1%. Europe opened higher and gained 1.6%. US index futures were sharply higher overnight, and the market gapped up at the open to SPX 1680. The rally continued until 11:00 when the SPX hit 1684. Then after a pullback to SPX 1678 by 11:30 the market worked its way higher again. Heading into the close the SPX hit 1684 again, and closed there.
For the day the SPX/DOW were +0.80%, and the NDX/NAZ were +0.55%. Bonds lost 17 ticks, Crude dropped $2.25, Gold slid $21, and the USD was flat. Medium term support rises to the 1680 and 1628 pivots, with resistance at the 1699 and 1762 pivots. Tomorrow: Wholesale inventories at 10:00.
The market gapped up again today for the fourth time in the past six trading days. Today’s gap up took the SPX right to the OEW 1680 pivot, and then into its upper range. This rally is now pushing the limits of an Intermediate wave B counter-trend advance. This type of B wave activity has occurred before in previous corrections during this bull market. And each time, it has forced a closer look at the wave patterns.
After reviewing the charts we are maintaining the current count. But are now considering, as an alternate, a potential irregular Int. B wave in the SPX or that Major wave 4 ended at the recent lows in the DOW. The market has now hit one of its many inflection points during this 4+ year run. Should the SPX clear the OEW 1680 pivot range (1673-1687) these alternate counts would gain in probability.
Short term support is at the 1680 pivot and SPX 1658-1667, with resistance at the 1699 pivot and SPX 1710. Short term momentum hit extremely overbought today, then ended the day with another potential negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1661. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market