SHORT TERM: turnaround Tuesday, DOW +62
Overnight the USG shut down non-essential operations and Asian markets rose 0.3%. European markets opened lower but gained 0.8%. US index futures were higher overnight, and the market opened higher at SPX 1685 and continued to rally. In the opening minutes the SPX hit 1689, then pulled back to 1684 by 10:00. At 10:00 ISM manufacturing was reported higher: 55.2 v 55.7, and the market started to rally again. By 12:30 the SPX had rallied to 1697, and then began to pullback. Nearing 3:30 the SPX hit 1689 then spiked higher in the closing minutes to end the day at 1695.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +1.15%. Bonds lost 8 ticks, Crude slipped 50 cents, Gold dropped $37, and the USD was lower too. Medium term support remains at the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow: the ADP index at 8:15, and a speech from FED chairman Bernanke at 3:30.
The market opened higher today, despite the USG shut down, and rallied to SPX 1697 before backing off some at the close. After the rally cleared yesterday’s SPX 1687 we labeled the recent decline an ‘abc’ completing a Minor wave A. This abc rally, thus far, appears to be Minor B. When the market realizes, a government that can not agree on a budget has little chance of raising the debt ceiling in two weeks, Minor C should begin.
Short term support is at the 1680 pivot and SPX 1654-1665, with resistance at the 1699 pivot and SPX 1730. Short term momentum hit overbought today and then dipped. The short term OEW charts turned positive with the reversal level now SPX 1692. Best to your trading!
MEDIUM TERM: uptrend rebounding
LONG TERM: bull market