SHORT TERM: rally continues, DOW +221
Overnight the Asian markets gained 0.4%. Europe opened higher, dropped, then gained 0.3%. US index futures were lower overnight but rebounded after Q3 GDP was reported higher than expected: +3.5% v +2.5% est. Also at 8:30 weekly Jobless claims were reported higher: 287k v 283k. At 9am FED chair Yellen’s speech was released: http://www.federalreserve.gov/newsevents/speech/yellen20141030a.htm. The market opened four points below yesterday’s SPX 1982 close, dipped to 1977, and then began to rally. Within the opening minutes the SPX rallied to 1984, then dropped to 1975 by 10am. After that the market rallied to SPX 1999 by 2pm. A pullback followed to SPX 1987 by 3pm, then the market rallied into at 1995 close.
For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +0.30%. Bonds gained 2 ticks, Crude dropped $1.20, Gold slid $12, and the USD was higher. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Personal income/spending and the PCE at 8:30, the Chicago PMI at 9:45, and Consumer sentiment at 10am.
The market opened lower today, bounced, then hit SPX 1975. After that it rallied, with nothing more than a three point pullback, to SPX 1999. This market has now rallied about 1.5% more than what was expected when this uptrend began at SPX 1821. In fact, the strength of the rally has been quite surprising as well. Since that low, 11 days ago, the market has made a higher low and a higher/equal high every day. Do not recall, in this five years bull market, when that has occurred before.
We continue to count this uptrend as three waves SPX: a 1898, b 1878, and c 1999. At SPX 2003 wave c equals 1.618 wave a. The rally has been so steady that counting our shortest timeframes has been futile. We can state two points of interest at this time. If the market makes new highs and this uptrend turns into five waves, then Primary III has extended yet again. If the market makes new highs, it will be the first time since this bull market began, that it has done so without aide of a FED liquidity program. All new bull market highs up till now, have been driven with either QE 1, 2 or 3, or Operation Twist 1 or 2. This would suggest the dynamics of this bull market may be changing. Which could suggest a more normalized business cycle is now driving the bull market. Two things to consider in the weeks and months ahead, if the market makes new highs. Short term support is at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum continues to set up negative divergences. Best to your end of month trading!
MEDIUM TERM: Major B uptrend continues
LONG TERM: bull market