SHORT TERM: rally continues, DOW +19
Overnight the Asian markets gained 1.8%, mostly Japan. Europe opened lower and lost 1.0%. US index futures were higher, and then lower, overnight. The market opened one point below Friday’s SPX 1887 close, dipped to 1882 in the opening minutes, and then started to rise. The rally was a bit choppy as there were several five point swings along the way. But nothing like the volatility we have seen in the past week or so. At noon FED governor Tarullo’s speech was released in a closed door meeting at the NY FED: http://www.federalreserve.gov/newsevents/speech/tarullo20141020a.htm. Worth the read. Heading into the close the SPX hit 1905, then dipped to close at 1904.
For the day the SPX/DOW were +0.50, and the NDX/NAZ were +1.40%. Bonds gained 5 ticks, Crude dipped 5 cents, Gold rose $8, and the USD was lower. Medium term support rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: Existing home sales at 10am.
The market opened lower today, dipped to SPX 1882, and then rallied for the rest of the day. We did get a lower opening, but it did not dip below SPX 1878 as expected. As a result we updated the hourly SPX chart to display a Minor ‘a’ at 1898 and Minor ‘b’ at 1878. Minor wave c, to complete Int. wave A, should currently be underway. If Minor c = a, Int. A should end at the 1956 pivot. If c = 0.618 a, then Int. A should end at the 1929 pivot. Short term support is at the 1901 pivot and SPX 1878, with resistance at the 1929 and 1956 pivots. Short term momentum may be setting up a negative divergence, but no signs of weakness yet. Best to your trading!
MEDIUM TERM: Major A downtrend may have bottomed
LONG TERM: bull market