SHORT TERM: FED chair Yellen rally, DOW +193
Overnight the Asian markets gained 1.2%. European markets opened higher and gained 1.4%. US index futures were higher overnight, and FED chair Yellen’s testimony was released: http://www.federalreserve.gov/newsevents/testimony/yellen20140211a.htm. The market opened two points above yesterday’s SPX 1800 close, and then started to rally. At 10am Wholesale inventories were reported higher: +0.3% v +0.5%. The market continued to rally throughout the day, hitting SPX 1824 around 3:30. A pullback to SPX 1818 then occurred just before a 1820 close.
For the day the SPX/DOW were +1.15%, and the NDX/NAZ were +1.05%. Bonds lost 13 ticks, Crude slipped 20 cents, Gold rallied $14, and the USD was flat. Medium term support remains at the 1779 and 1699 pivots, with resistance at the 1828 and 1840 pivots. Tomorrow: the Treasury budget at 2pm.
The market opened just two points above yesterday’s SPX 1800 close, and two point pullbacks are all that occurred until the SPX hit 1824. Around noon the SPX cleared the 1814 level we had been monitoring. This suggests an uptrend is probably underway. But the questions remains; “Is it a B wave of PRI IV, or Intermediate wave iii of Major wave 5 ?”. The fact that the NDX may hit new highs, does not help answer the question. During the SPX/DOW B wave rally of Primary II, the NDX made new highs then as well. Growth led that B wave rally, while the cyclicals lagged. Then they all declined together.
The wave structure from the recent SPX 1738 low is quite simple: 1788-1777-1824 so far. This looks quite impulsive. The next area of resistance is the OEW 1828 pivot, which is also near to an equality of waves relationship: 1738-1788 and 1777-1827. This should be an interesting resistance area. Short term support is now at SPX 1814 and SPX 1800, with resistance the 1828 and 1841 pivots. Short term momentum is about as overbought as it ever gets. The short term OEW charts are still positive with the reversal level now at SPX 1793. Best to your trading!
MEDIUM TERM: probably uptrending again
LONG TERM: bull market