SHORT TERM: gap up opening rebound, DOW +123
Overnight the Asian markets lost 0.3%. European markets opened lower, but closed +0.1%. US index futures made lower lows, but then rallied higher overnight. The market gapped up at the open to SPX 1963 and continued to rally. At 10am Consumer sentiment was reported lower: 81.3 v 82.5, and Leading indicators were reported higher: +0.3% v +0.5%. The rally continued until 3:30 when the SPX hit 1980. Then a dip ended the week at SPX 1978.
For the day the SPX/DOW were +0.85%, and the NDX/NAZ were +1.60%. Bonds lost 3 ticks, Crude slipped 40 cents, Gold dropped $10, and the USD was flat. Medium term support rises to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Today the WLEI was reported lower: 54.2% v 54.4%.
The market gapped up today and continued to rally into the afternoon as if yesterday did not occur. If the Malaysian airliner was not shot down, and Israeli ground forces did not go into Gaza, then today was not options expiration Friday. The point: the crescendo of negative market sentiment yesterday afternoon, was probably reversed due to options expiration. Monday is another day. Thus far it looks like we had a Minor a to SPX 1953, a Minor b to SPX 1984, and now a Minor c underway. Expected the 1973 pivot range to hold today’s rally, which it did. Also expect Minor c to resume next week.
Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and the 2019 pivot. Short term momentum reversed from extremely oversold yesterday to overbought today. The short term OEW charts turned positive with the reversal level now SPX 1973. Best to your weekend!
MEDIUM TERM: downtrend probably underway
LONG TERM: bull market