SHORT TERM: gap down opening then rebound, DOW +33
Overnight the Asian markets were mixed. Europe opened lower and lost 0.3%. US index futures were lower overnight. At 8am FED governor Tarullo’s speech was released: http://www.federalreserve.gov/newsevents/speech/tarullo20141120a%20.htm. At 8:30 weekly Jobless claims were reported higher: 291k v 290k, and the CPI was reported flat: 0.0% v +0.1%. The market gapped down at the open to SPX 2040, yesterday’s low, then began to rally. At 10am the Philly FED was reported sharply higher: 40.8 v 20.7, Existing home sales were reported higher: 5.26mn v 5.17mn, and Leading indicators were higher too: +0.9% v +0.8%. The market continued to rally until 11:30 when the SPX hit 2054, above yesterday’s high, then it started to pullback. Around 3:30 the SPX hit 2049, then bounced to close at 2053.
For the day the SPX/DOW were +0.20%, and the NDX/NAZ were +0.50%. Bonds gained 5 ticks, Crude rose $1.25, Gold rallied $12, and the USD was lower. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Senate testimony from FED Governor Tarullo at 9:30, and it’s Options expiration Friday.
The market gapped down at the open for the second day in a row. That has not happened since the end of the downtrend in mid-October. After retesting SPX 2040 the market rallied into late morning. After the retest we arrived at the conclusion that Minor 5 may be subdividing. We posted a Minute i at yesterday’s SPX 2056 high, and a Minute ii at today’s 2040 low. It looks like the wave ii could have been a 2040-2052-2040 flat. Should the market clear SPX 2056 we will assume Minute iii has been underway. Short term support is now at SPX 2040 and the 2019 pivot, with resistance at SPX 2056 and the 2070 pivot. Short term momentum rose during the rally on what appears to be a positive divergence at today’s low. Best to your trading the often volatile options expiration Friday!
LONG TERM: bull market