SHORT TERM: gap up and go day, DOW +162
Overnight the Asian markets gained 0.7%. Europe opened higher and gained 1.2%. US index futures were higher overnight. At 8:30 Housing starts were reported higher: 946k v 907k, Building permits lower: 990k v 1018k, then at 9:15 Industrial production was reported higher: +0.7% v +0.6%. The stock market gapped up at the open to SPX 1856, then pulled back to 1848 by 11am. The SPX had closed at 1843 yesterday. The market then rallied to SPX 1858 by 12:30 as FED chair Yellen was giving her speech: http://www.federalreserve.gov/newsevents/speech/yellen20140416a.htm. After a pullback to SPX 1852 by 1pm the market moved higher again. At 2pm the Beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201404.htm. Heading into the close the SPX hit 1862 and closed there.
For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.30%. Bonds lost 8 ticks, Crude added 15 cents, Gold ticked up $1, and the USD was higher. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30, the Philly FED at 10am, and it is Options expiration day.
The market gapped up at the open today for the second time this week. But for the first time this week it did not experience a sharp selloff in the NDX/NAZ. Thus far the SPX has retraced about 61.8% of its 1897-1814 downtrend, when reaching 1862 today. Since the wave activity off the SPX 1814 low was quite choppy, it is difficult to determine if this rally is just a B wave in an ongoing downtrend, or the beginning of a new uptrend. Should the SPX close above the 1869 pivot tomorrow then a new uptrend is probably underway.
Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum ended the day quite overbought. The short term OEW charts remain positive from SPX 1838, with the reversal level now 1843. Best to your trading options expiration and your three day weekend!
NOTE: Will be taking a road trip over the holiday weekend: Friday markets are closed. Will not be available Thursday, Friday, Saturday or Sunday. May be able to do the Thursday update, and Weekend update, but no guarantees. Options expiration this week is Thursday.
MEDIUM TERM: downtrend
LONG TERM: bull market