SHORT TERM: consolidation day, DOW +32
Overnight the Asian markets gained 1.1%, mostly India. Europe opened lower and lost 0.5%. US index futures were lower overnight and the market opened three points below yesterday’s SPX 1876 close. Within the first few minutes the SPX rose to 1875 then declined to 1867 by 10am. At 10am Wholesale inventories were reported higher: +1.1% v +0.5%, and the FED released: http://www.federalreserve.gov/newsevents/press/monetary/20140509a.htm. The market then rallied to SPX 1874, before heading back to 1867 by just past 11am. After the double bottom the market rallied. At 1pm the SPX hit 1879, pulled back to 1871 by 2:30, then made a double top at 1879, before closing at 1878.
For the day the SPX/DOW were +0.15%, and the NDX/NAZ were +0.40%. Bonds lost 4 ticks, Crude slipped 15 cents, Gold was flat again, and the USD was higher. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Last night the FED reported an increase in the M1-multipler: 0.708 v 0.690, and today the WLEI was reported higher: 54.5% v 54.2%.
The market opened lower today and made a new pullback low at SPX 1867. After a rally, then retest of that low, the market moved up to SPX 1879. Then another pullback, this time to SPX 1871, followed by another rally to 1879. A seemingly non-eventful day, in a market that has gone nowhere but sideways for more than two months. After reviewing the charts we found that the Primary I topping process lasted about five months: Feb11 to July11. Even if the expected third wave does not kick in soon, we still have a way to go before the Primary III top.
Short term support is at the 1869 and 1841 pivots, with resistance at SPX 1889/1991 and the 1901 pivot. Short term momentum rose from oversold this morning to above neutral. The short term OEW charts turned marginally positive with the reversal level now SPX 1877. Best to your weekend!
MEDIUM TERM: uptrend probable
LONG TERM: bull market