SHORT TERM: another wild FOMC day, DOW +293
Overnight the Asian markets gained 1.2%. Europe opened higher and gained 0.8%. US index futures were higher overnight. At 8:30 Building permits were reported lower: 1007k v 1034k, and we received three Housing start reports (latest first): 1091k v 899k v 873k v 891k. The market opened one point above yesterday’s 1781 close and continued higher until hitting 1785 around 10:30. Then it started to pullback. Around 1:30 the market came within one point of last week’s SPX 1772 low, then it started to rise heading into the FOMC statement: http://www.federalreserve.gov/newsevents/press/monetary/20131218a.htm, and http://www.federalreserve.gov/newsevents/press/monetary/20131218b.htm economic update. Just before the statements the market rallied to SPX 1781. Then after the statements were released the market dropped to SPX 1768, rallied to 1795, then dropped again to 1785 by 2:30. At that time FED chairman Bernanke started his press conference and the market rose even higher. Heading into the close the SPX hit 1811, just three points below its all time high, and closed there.
For the day the SPX/DOW were +1.75%, and the NDX/NAZ were +1.15%. Bonds lost 12 ticks, Crude rose 45 cents, Gold slid $10, and the USD was higher. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: weekly Jobless claims at 8:30; then Existing home sales, the Philly FED and Leading indicators at 10am.
Important day! The market opened higher and then began to fade as if some knew tapering was on the way. About one half hour before the FOMC statement the market was within one point of last week’s SPX 1772 low. Then things really got wild as noted above. Preliminary analysis suggests the uptrend is in the process of extending. This suggests an Int. wave ii low may have occurred at today’s SPX 1768 low. Lots of technical and fundamental news to digest, and this will take a bit of time to work out. In the meantime, the medium term trend is still up and we are still in a bull market.
Short term support is at the 1779 pivot and SPX 1746, with resistance at SPX 1814 and the 1828 pivot. Short term momentum ended this wild day extremely overbought. The short term OEW charts are positive with the reversal level now SPX 1786. Best to your trading!
MEDIUM TERM: uptrend rebounding
LONG TERM: bull market