SHORT TERM: gap up and go, DOW +182
Overnight the Asian markets lost 0.3%. Europe opened higher and gained 1.1%. US index futures gapped down 6 points at the open last night, but gradually moved up from that low. At 8:30 the NY FED was reported higher: 5.6 v 4.5, then at 9:15 Industrial production was reported higher: +0.6% v -0.3%. The market gapped up at the open to SPX 1852 and continued to rally. The market had closed at SPX 1841 on Friday. By 10am the SPX hit 1862, when the NAHB housing index was reported higher: 47 v 46. Then the market pulled back to SPX 1853 by 11:30. After that the market tried to rally again. By 2:30 the SPX hit 1861, pulled back to 1856 by 3:30, then closed at 1859.
For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +0.90%. Bonds lost 11 ticks, Crude slid $1.05, Gold dropped $14, and even the USD declined. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: Housing starts, Building permits, and the CPI at 8:30.
While gapping down overnight after the Crimea pro-Russian vote, futures rallied right into today’s open and the market gapped up. On Friday we had noted a short term positive divergence and a daily oversold condition in all four major indices. The market responded to those technicals with a 20 point surge in just one hour of trading. Thus far, this rally looks like the beginning of Minor wave 3. However, we would like to see a new high in the SPX or NDX/NAZ before placing a Minor 2 label at Friday’s low.
Short term support remains at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum is at overbought. The short term OEW charts swung positive early this morning, with the reversal level SPX 1858. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market