thursday update

SHORT TERM: gap down consolidation day, DOW +11

Overnight the Asian markets gained 0.2%. Europe opened higher and gained 1.6%. US index futures were lower overnight, and at 8:30 weekly Jobless claims were reported higher: 379k v 368k. The market gapped down at the open to SPX 1806, bounced to 1808, then declined to 1801 just past 10am. At 10am the Philly FED was reported higher: 7.0 v 6.5, Leading indicators were reported higher: +0.8% v +0.2%, but Existing home sales were lower: 4.90m v 5.12m. The market began to rally. Around 3:30 the market made it back to unchanged at SPX 1811. Then dipped into a SPX 1810 close.

For the day the SPX/DOW were mixed, and the NDX/NAZ were -0.30%. Bonds lost 21 ticks, Crude gained 65 cents, Gold dropped $28, and the USD was higher. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1841 pivots. Tomorrow: Q3 GDP at 8:30 and it’s Options expiration Friday.

The market gapped down at the open today following yesterday’s massive two hour 43 SPX point reversal. After the FED announced ‘measured’ tapering has begun. The pullback found support around SPX 1801 and then rebounded for the rest of the day. It took us a while, last night, to digest the news and update the charts. While there is some debate, in the OEW group, about the most probable count. The DOW suggests Major wave 5 is extending, and that is the count that was posted. More on this, and the ramifications of the FED taper announcement in the weekend update.

Short term support is at the 1779 pivot and SPX 1768, with resistance at SPX 1814 and the 1828 pivot. Short term momentum declined modestly from yesterday’s extreme overbought reading. The short term OEW charts remain positive with the reversal level now SPX 1794. Best to your trading the last busy Friday of the year.

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp