SHORT TERM: gap up rebound, DOW +79
Overnight the Asian market lost 0.8%. Europe opened lower but gained 0.2%. US index futures were higher overnight. The market gapped up to SPX 1970 at the open, ticked up to 1971, and then began to pullback. The SPX had closed at 1964 yesterday. After a pullback to SPX 1965 by 10:30, the market hit 1971 again just before 11am. Then it dipped lower, and moved sideways ahead of the FED’s FOMC minutes: http://www.federalreserve.gov/newsevents/press/monetary/20140709a.htm. Just after the release the SPX hit 1966, and then began to rally. Just past 3pm the SPX hit 1974, then dipped to close at 1973.
For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.70%. Bonds gained 5 ticks, Crude lost $1.25, Gold rallied $7, and the USD was lower. Medium term support remains at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Tomorrow: weekly Jobless claims at 8:30, Wholesale inventories at 10am, and a speech from FED vice chair Fischer after the close.
The market gapped up today, following two gap down openings. Yesterday’s low found support in the 1956 pivot range (1959) where the market was extremely oversold short term. Today’s rally ran into resistance in the 1973 pivot range (1974) and the market hit overbought short term. When considering the recent high ended within 3 points of SPX 1989 (Minor 5 = 0.618 Minor 1), this week’s activity looks quite normal for a declining trend. Currently, we have nearly every European market we track in a confirmed downtrend, i.e. England, France, Germany, Greece, Italy and Spain. This type of across the board activity has not occurred since the mid-January high. Also, the SPX Industrials sector XLI has confirmed a downtrend: sometimes a leading indicator for the DOW. This supporting data suggests SPX 1986 was the Intermediate wave iii uptrend high.
Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1986. Short term momentum hit overbought today. The short term OEW charts flip-flopped all day, ending positive, with the reversal SPX 1970. Best to your trading!
MEDIUM TERM: uptrend may have topped
LONG TERM: bull market