SHORT TERM: another Yellen rally, DOW +74
Overnight the Asian markets gained 0.5%. Europe opened lower and lost 0.2%. US index futures were lower overnight but rallied after the economic reports at 8:30: weekly Jobless claims higher: 348k v 336k, and Durable goods orders lower: -1.0% v -4.2%. The market opened two points below yesterday’s SPX 1845 close, continued higher to 1847, then pulled back to yesterday’s 1841 low by around 10am. At 10am FED chair Yellen began her Senate testimony. The market began to rally and reached SPX 1855 by 1:30. After a pullback to SPX 1850 by 3:30, the market spiked in the last few minutes to close at 1854.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.60%. Bonds gained 7 ticks, Crude slipped 30 cents, Gold added $1, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1884 pivots. Tomorrow: Q4 GDP at 8:30; then the Chicago PMI, Consumer sentiment and Pending home sales all around 10am. Also at 10am FED governor Stein has a panel discussion in NYC.
The market traded much lower overnight but opened just two points lower and then rallied, after a retest of yesterday’s low, for the rest of the day. With all the choppy action of late we posted a potential a-b-c pattern from last Thursday’s SPX 1825 low. This could also be counted as a 1-2-1-2 pattern from that low, as the b wave up was three waves: 1846-1836-1859. Should the market clear SPX 1859 this is probably the right count. If not, the a-b-c count will probably unfold. The NAZ, which may be leading, broke out of its choppy pattern to the upside today.
Short term support is at SPX 1851 and the 1841 pivot, with resistance at SPX 1859 and the 1869 pivot. Short term momentum put in a positive divergence at today’s low, and hit overbought during the day. The short term OEW charts turned positive with the reversal level now SPX 1847. Best to your GDP trading!
MEDIUM TERM: uptrend
LONG TERM: bull market