SHORT TERM: rally continues, DOW +89
Overnight the Asian markets gained 0.5%. Europe opened lower but gained 0.7%. US index futures were higher overnight. At 8:30 Housing starts (907k v 880k), Building permits (1018k v 937k) and the CPI (+0.1% v +0.1% ) were all reported higher. That’s seven for seven economic upticks so far this week. The market opened three points above yesterday’s SPX 1859 close and continued to rally. At 10:30 the SPX hit 1872, pulled back to 1867 by 11am, then moved higher. Around 3pm the SPX hit 1874, then dipped to close at 1872.
For the day the SPX/DOW were +0.65%, and the NDX/NAZ were +1.25%. Bonds gained 7 ticks, Crude rose $1.15, Gold dropped $10, and the USD was higher. Medium term support rises back to the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: the Current account balance at 8:30, then the FED’s statement at 2pm, followed by a press conference at 2:30.
The market opened higher today resuming its rally from SPX 1840 last Friday. Thus far the rally is looking like a third wave – Minor wave 3. Should either the SPX (1884) or NAZ (4372) clear their recent highs, the probabilities of Minor 3 underway would rise dramatically. We have a failed flat “a-b-c” posted on the hourly charts: 1834-1884-1840. The DOW/NDX did make lower lows during the recent pullback.
Short term support is at the 1869 and 1841 pivots, with resistance at SPX 1884 and the 1901 pivot. Short term momentum is quite overbought. The short term OEW charts remain positive with the reversal level now SPX 1862. Best to your trading the often volatile FOMC day.