SHORT TERM: rally continues, DOW +81
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 0.7%. US index futures were higher overnight as well. At 8:30 the CPI (+0.1% v +0.3%, Housing starts (1093k v 893k) and Building permits (1052k v 963k) were all reported higher. The market opened three points above yesterday’s SPX 1972 close and continued to rally. Nearing 3:30 the SPX hit 1983, then dipped to close at 1982.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.45%. Bonds lost 4 ticks, Crude dropped 75 cents, Gold slipped $3, and the USD was higher. Medium term support rises to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: FOMC minutes at 2pm.
On Friday the market closed just under the 1956 pivot, then gapped over it on Monday. On Monday the market closed just under the 1973 pivot, then opened above it on Tuesday. This is typical market activity, during this bull market, when dealing with overhead resistance pivots. The next important level is not a pivot, but the all time high SPX 1991. Thus far from the SPX 1905 low we have had three rallies: 1905-1945, 1928-1964, and 1942-1983. We have been labeling this advance as Minor 1-2, and Minute i-ii-iii. Notice all three rallies have been about the same size, between 36 and 41 points. Even the two pullbacks (1945-1928 and 1964-1942) have been similar. With this symmetry and an extreme overbought short term reading today a pullback may be next.
Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1991 and the 2019 pivot. Short term momentum hit extremely overbought today. The short term OEW charts remain positive with the reversal level now SPX 1975. Best to your trading!
MEDIUM TERM: confirmation highly probable
LONG TERM: bull market