SHORT TERM: another gap up opening, DOW +78
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.3%. US index futures followed Europe and were higher overnight. At 8:30 the PPI was reported higher: +0.4% v -0.2%, then at 9:15 Industrial production was reported higher: +0.2% v +0.6%. The market gapped up at the open to SPX 1983, ticked up to 1984, then began to pullback. The SPX had closed at 1973 yesterday. At 10am the NAHB was reported higher: 52 v 49. The pullback lasted until 11:30 when the SPX hit 1976, then the market started to rise. At 2pm the FED’s beige book was released: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201407.htm. At 2:30 the market hit 1982, then closed there.
For the day the SPX/DOW were +0.45%, and the NDX/NAZ were +0.35%. Bonds gained 1 tick, Crude rose $1.40, Gold added $5, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims, Housing starts and Building permits at 8:30, then the Philly FED at 10am.
The market gapped up at the open for the second day this week. This gap, like Monday, was also inspired by a rally in Europe. The rally took the market above yesterday’s SPX 1983 high to 1984. Despite the new highs in the DOW, NDX and TRAN, the SPX and NAZ have failed to make new highs. As a result, until they do, we continue to feel this is a B wave rally. The same parameters, noted yesterday, are in play: above 1986 Minor 5, below 1960 Intermediate iv.
Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum ended the day with a negative divergence. The short term OEW charts turned positive early, and the reversal level now SPX 1978. Best to your trading!
MEDIUM TERM: still favoring a downtrend
LONG TERM: bull market