SHORT TERM: gap up and go day, DOW +323
Overnight the Asian markets gained 0.3%. European markets opened higher and gained 1.9%. US index futures were higher overnight, and at 8:30 weekly Jobless claims were reported higher: 374k v 308k. The market gapped up at the open to SPX 1672, with budget and debt ceiling resolutions in sight. The SPX had closed at 1656 yesterday. By 10:30 the market had rallied to SPX 1682. Then it pulled back to SPX 1677 before heading higher again. Heading into the close the SPX hit 1693 and ended the day there. Quite a rally! Yesterday the FED released the following two statements, and one today: http://www.federalreserve.gov/newsevents/press/other/20131009a.htm, http://www.federalreserve.gov/newsevents/press/other/20131009b.htm, http://www.federalreserve.gov/newsevents/press/bcreg/20131010a.htm.
For the day the SPX/DOW gained 2.2%, and the NDX/NAZ gained 2.2%. Bonds lost 8 ticks, Crude gained $1.30, Gold dropped $19, and the USD was higher. Medium term support jumps to the 1680 and 1628 pivots, with resistance at the 1699 and 1779 pivots. Tomorrow we may/or may not get Retail sales and the PPI at 8:30, plus Consumer sentiment and Business inventories at 10:00. Also, at 11:00 there is a speech by FED governor Powell.
The market gapped up at the open and kept on going in one the of the strongest one day rallies we have seen in quite some time. Yesterday we had thought a Minor b wave rally was underway from the SPX 1646 low. With a potential upside of around SPX 1668. When the market opened at SPX 1672, signaling the best rally since the 1730 downtrend began. We upgraded charts from a Minor b rally to an Intermediate wave B rally. Typically, Int. B rallies can retrace between 38.2% and 61.8% of the previous decline. Since Int. A dropped 84 points (1730-1646), an Int. B retracement could go from SPX 1678-1698. The market hit SPX 1693 today. Should the market exceed SPX 1700 in the coming days we will need to consider some alternate counts for the SPX.
Short term support is now at the 1680 pivot and SPX 1654-1665, with resistance at the 1699 pivot and SPX 1730. Short term momentum ended the day quite overbought. Best to your trading!
MEDIUM TERM: downtrend, with counter trend rally
LONG TERM: bull market