SHORT TERM: Third gap up opening in a row, DOW +75
Overnight the Asian markets gained 0.5%. European markets opened higher and gained 0.7%. US index futures were higher overnight, and the market gapped up at the open to SPX 1879. The market had closed at SPX 1872 yesterday. The market continued to rally until just past 10am when it hit a new all time high at SPX 1885. At 10am Construction spending was reported higher: +0.1% v +0.1%, and ISM manufacturing was reported higher: 53.7 v 53.2. A pullback followed to SPX 1877 by noon, then the market tried to rally again. Heading into the close the SPX hit 1886 and closed there.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +1.70%. Bonds lost 4 ticks, Crude dropped $2.15, Gold slipped $3, and the USD was flat. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1962 pivots. Tomorrow: the ADP index at 8:15, then Factory orders at 10am.
The market gapped up at the open for the fifth time in the past six trading days. Looked back the past two years and did not see this occur even once. Nevertheless, the SPX cleared the 1834-1884 range, albeit it by just two points, to the upside. This suggests the Intermediate wave iii uptrend is extending. We updated the charts to reflect this potential, and even updated the DOW charts to a potentially more bullish scenario. We are also observing new highs in market breadth and the broader NYSE index. The NDX/NAZ have a lot of catching up to do. The next OEW pivot is at SPX 1901, then a large gap to the 1962 pivot.
Short term support is now at SPX 1884 and the 1869 pivot, with resistance at the 1901 and 1962 pivots. Short term momentum is reaching quite overbought. The short term charts remain positive with the reversal level now SPX 1870. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market