SHORT TERM: choppy Opex day, DOW -30
Overnight the Asian markets gained 1.5%. Europe opened higher and gained 0.5%. US index futures were higher overnight, and the market opened two points above yesterday’s SPX 1840 close. After a dip to SPX 1839 in the opening minutes the market bounced to 1845 by 10am. At 10am Existing home sales were reported lower: 4.62m v 4.87m. The market then dipped to SPX 1840 by 10:30, and then began to rally. At 11am the SPX hit 1846, and another pullback followed. At 2pm the FED released the following: http://www.federalreserve.gov/newsevents/press/monetary/20140221a.htm. The pullback continued until 2:30 when the SPX hit 1837. The market then rose to SPX 1842 by 3:30, but again pulled back into a 1836 close.
For the day the SPX/DOW were -0.20%, and the NDX/NAZ were -0.20%. Bonds gained 4 ticks, Crude slipped 50 cents, Gold was flat, and the USD was lower. Medium term support remains at the 1828 and 1779 pivots, with resistance at the 1841 and 1869 pivots. Last night the FED reported an increase in the Monetary base: $3.883tn v $3.789tn. Today the WLEI was reported lower again: 52.5% v 53.2%.
The market opened higher today, made a new rally high at SPX 1846, then pulled back for the rest of the day. Today’s high and pullback now creates a bit of a more complex wave structure from the SPX 1738 low. We now have the five waves up 1848, a decline to 1825, then 1846-1836 so far. Nevertheless it all still looks impulsive. This and more will be discussed in the weekend update.
Short term support is at the 1828 pivot and SPX 1814, with resistance at the 1841 pivot and SPX 1851. Short term momentum declined to slightly oversold after hitting overbought earlier today. The short term OEW charts remain positive with the reversal level now SPX 1835. Best to your weekend.
MEDIUM TERM: uptrend probable
LONG TEM: bull market