SHORT TERM: gap down opening reversed, DOW +64
Overnight the Asian markets lost 1.2%. European markets opened lower but gained 0.2%. US index futures were much lower overnight. At 8:30 weekly Jobless claims were reported higher: 339k v 331k, and Retail sales were reported lower: -0.4% v +0.2%. The market gapped down at the open to SPX 1809 and then started to rally. The SPX had closed at 1819 yesterday. At 10am Business inventories were reported higher: +0.5% v +0.4%. The rally continued into the afternoon, with only 2-3 point pullbacks along the way, until the SPX hit 1830 around 1pm. It then traded in a three point range into a SPX 1830 close.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.90%. Bonds gained 16 ticks, Crude slipped 5 cents, Gold rallied $11, and the USD was lower. Medium term support rises to the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Tomorrow: Export/Import prices at 8:30, Industrial production at 9:15, then Consumer sentiment just before 10am.
The market gapped down this morning on weak Asian markets and negative economic reports. But immediately started to rally right after the open, ignoring all that, and made a new rally high at SPX 1830. The market has clearly rallied five waves up from last week’s SPX 1738 low: 1788-1777-1827-1809-1830. The NDX, SOX and NYAD have all made new bull market highs already, as this apparent impulse wave continues to work its way higher. Should the SPX/DOW also make new highs then Intermediate wave iii is definitely underway. Until then, there is still the possibility that this rally is a B wave within a larger correction. But that possibility is declining.
Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1851. Short term momentum is beginning to develop a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1810. Best to your trading the Friday before a three day holiday.
MEDIUM TERM: uptrend more probable
LONG TERM: bull market