SHORT TERM: gap up and go Friday, DOW +209
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.1%. US index futures were much higher overnight. At 8:30 monthly Payrolls were reported higher: 248k v 142k, the Unemployment rate dropped: 5.9% v 6.1%, and the Trade deficit was slightly lower: -$40.1bn v -$40.5bn. The market gapped up at the open to SPX 1956 and continued to rally. The SPX had closed at 1946 yesterday. At 10am the SPX had cleared the 1956 pivot and entered the 1973 pivot range at 1967. Also at 10am ISM services was reported lower: 58.6 v 59.6. The market pulled back to SPX 1960 by 10:30, then resumed its Friday rally. Around 3pm the SPX hit 1971, then pulled back to close at 1968.
For the day the SPX/DOW were +1.20%, and the NDX/NAZ were +1.00%. Bonds lost 4 ticks, Crude dropped $1.25, Gold fell $22, and the USD soared. Medium term support rises back to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Last night the Monetary base was reported lower: $4.036tn v $4.150tn. Today the WLEI was reported lower: 51.8% v 52.0%.
The market gapped up at the open today, continuing yesterday’s afternoon rally. When the SPX hit 1964, clearing the 1956 pivot, which we thought would be good resistance, we updated yesterday’s low from Minute a to Intermediate A of the downtrend. Apparently the seven waves down from SPX 1985 was all of Minor c. Thus far we have had an abc down: 1979-2000-1964 for Minor A; an abc up to SPX 1985 for Minor B; and recently seven waves down to 1926 for Minor C/Int. A. From the SPX 2019 uptrend high that is a 93 point decline. With Int. B underway we would expect this rally to top out around SPX 1973 (50% retracement) or SPX 1986 (61.8% retracement). The first retracement is at the 1973 pivot range, and the second around the recent Minute wave b high 1985/1986. Since Germany’s DAX was closed today, US stocks could stay favorable into at least Monday’s open. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1985/1986. Short term momentum hit quite overbought today. Best to your weekend!
MEDIUM TERM: downtrend
LONG TERM: bull market