SHORT TERM: down opening then rally extends, DOW +127
Overnight the Asian markets finished mixed. Europe opened lower but gained 0.5%. US index futures were higher overnight, then dipped after early economic reports. At 8:30 Export (+0.2% v +0.3%)/Import(+3% v -0.1%) prices were reported higher. At 9:15 Industrial production was reported lower: -0.3% v +0.3%. The market opened three points below yesterday’s SPX 1830 close. It then bounced to SPX 1831, and pulled back to 1826 all in the first 15 minutes. After that it started to resume the rally. At 10am Consumer sentiment was reported unchanged: 81.2 v 81.2. At 3pm the SPX hit 1842. It then pulled back to SPX 1838 before ending the week at 1839.
For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +0.10%. Bonds lost 3 ticks, Crude slipped 5 cents, Gold rallied $16, and the USD was lower. Last night the FED reported an increase in the M1-multiplier: 0.723 v 0.699. Today the WLEI was reported lower: 53.3% v 54.2%. Medium term support remains at the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Monday is a holiday in the US.
The market opened lower today, dipped 5 points early, then rallied to SPX 1842. For those counting, the SPX has rallied 90 points since last Wednesday’s 1752 close (the day of the 1738 low). And, it has only had two decent pullbacks along the way. Clearly five waves up: 1788-1777-1827-1809-1842. With waves 1 and 3 equal (50 pts.), wave 5 is likely to be shorter. A short term negative divergence is still building, as the market again hit extremely overbought today. If the count is correct, the next pullback could take the SPX back to near the 1809 level.
Short term support is at the OEW 1828 pivot and SPX 1814, with resistance at the 1841 and 1869 pivots. Short term momentum hit extremely overbought again. The short term charts remain positive, since SPX 1765, with the reversal level now 1819. Best to your three-day weekend!
MEDIUM TERM: uptrend probable
LONG TERM: bull market