SHORT TERM: gap up and go day, DOW +228
Overnight the Russian-Ukraine situation was defused somewhat and stock markets rallied. The Asian markets gained 1.2%. Europe opened higher and gained 2.2%. US index futures were up 20 points prior to the open, and the market gapped up to SPX 1863 to start the day. The SPX had closed at 1846 yesterday. The rally continued, with just one 3 point pullback, until just before 2pm when the SPX hit 1874. After a pullback to SPX 1869 just past 2pm, the market rallied to 1876 by 3:30 then dipped to an 1874 close.
For the day the SPX/DOW were +1.45%, and the NDX/NAZ were +1.60%. Bonds lost 22 ticks, Crude dropped $1.65, Gold slid $16, and the USD was higher. Medium term support rises to the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: the ADP at 8:15, ISM services at 10am, then the FED’s beige book at 2pm.
Yesterday the market hit SPX 1834 around noon, when an erroneous Russia-Ukraine military “ultimatum” report was released. When the report was found to be false the market rallied to SPX 1849 by 3pm, pulled back to 1840 by 3:30, and then ended the day at 1846. Overnight President Putin defused the Russia-Ukraine situation, and markets rallied. At that low, as noted yesterday in the DOW count, the market was sufficiently oversold for a potential Minor wave 2 bottom.
Today’s rally exceeded the previous uptrend high at SPX 1868 before 10am, suggesting Minor wave 3 was underway. The 1869 pivot range (1862-1876) should be cleared next, if this is indeed Minor wave 3. This market has been quite choppy for more than a week, but it is a bull market and the trend is up. Short term support rises to the 1869 pivot and SPX 1859, with resistance at the 1901 and 1962 pivots. Short term momentum is currently quite overbought. The short term OEW charts turned positive, with the reversal level now SPX 1857. Best to your trading in this volatile market!
MEDIUM TERM: uptrend
LONG TERM: bull market