SHORT TERM: gap up opening, DOW +159
Overnight the Asian markets lost 0.2%. Europe opened lower but gained 0.4%. US index futures were higher overnight, and the market gapped up to SPX 1879 at the open. The SPX had closed at 1873 yesterday. The rally continued until 11am when the SPX hit Monday’s high at 1886. Then the market pulled back after FED chair Yellen’s speech: http://www.federalreserve.gov/newsevents/speech/yellen20140521a.htm. At noon the SPX hit 1880 then moved higher into the FOMC minutes release at 2pm: http://www.federalreserve.gov/newsevents/press/monetary/20140521a.htm. Right after the release the market hit SPX 1887, dipped to 1882, then rallied to 1889 by 3:30. A slip dip then ended the day at SPX 1888.
For the day the SPX/DOW were +0.90%, and the NDX/NAZ were +0.90%. Bonds lost 7 ticks, Crude rallied $1.50, Gold slipped $3, and the USD was flat. Medium term support remains at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Tomorrow: weekly Jobless claims at 8:30, then Existing home sales and Leading indicators at 10am.
The market gapped up at the open today for the second time this week. After hitting a low at SPX 1868 yesterday the market rallied to 1889 today. While yesterday’s low could have ended an important pullback. We would like to see SPX 1891 cleared before ruling out a retest of the 1860-ish area. This market has been quite choppy. On a positive note. Sentiment continues to improve in the growth indices, even though the DOW appeared to be leading today after yesterday’s positive divergence. Tomorrow should be the key to a continued move higher, or another sharp pullback.
Short term support is at the 1869 pivot and SPX 1860, with resistance at SPX 1891 and the 1901 pivot. Short term momentum ended the day slightly overbought. The short term OEW charts turned positive at the open with the reversal level now SPX 1881. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market