SHORT TERM: gap up opening, DOW +206
Overnight the Asian markets lost 0.1%. Europe opened lower but gained 0.2%. US index futures were higher overnight, and the market gapped up at the open to SPX 1707 and continued to rally. The SPX had closed at 1698 yesterday. At 10:00 the NAHB housing index was reported lower: 55 v 58. The rally continued until about 11:30 when the SPX hit 1722, and then it started to pullback. At 2PM the FED released the Beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201310.htm. Around 2:30 the SPX hit 1715, and then turned higher to end the day at 1722.
For the day the SPX/DOW were +1.35%, and the NDX/NAZ were +1.15%. Bonds gained 14 ticks, Crude rose $1.00, Gold slipped $1, and the USD was lower. Medium term support rises to the 1699 and 1680 pivots, with resistance at the 1779 pivot. Tomorrow we may/may not get reports on the following: weekly Jobless claims, Housing starts and Building permits at 8:30; Industrial production at 9:15; and the Philly FED at 10AM.
The market gapped up at the open on word that a Senate deal to re-open the gov’t and extend the debt ceiling for a few months was done. The rally took the SPX to within 8 points of its 1730 all time high, new highs in the NDX/NAZ, but the DOW is still about 300 points shy of its high. During the taper/no-taper event in mid-September, the markets rallied for two weeks ahead of the event, spiked on the no-taper news, then made an uptrend high the next day. Currently, the market has rallied for a week heading into the temporary gov’t deal day, spiked today, with the vote tonight. Until the DOW clears its 15,710 high we are maintaining the Int. b wave of Major a of Primary IV count.
Short term support is at the 1699 and 1680 pivots, with resistance at SPX 1730 and the 1779 pivot. Short term momentum hit slightly overbought today, then backed off. The short term OEW charts remain positive with the reversal level now SPX 1703. Best to your trading!
MEDIUM TERM: DOW downtrend, SPX/NDX/NAZ uptrend
LONG TERM: bull market