SHORT TERM: market gaps up, DOW +91
Overnight the Asian markets gained 0.6%. Europe opened higher and soared 2.1%. US index futures were much higher overnight, and at 9:30 FED governor Tarullo’s speech: http://www.federalreserve.gov/newsevents/testimony/tarullo20141121a.htm. The market gapped up at the open to SPX 2065 and continued to rise. The SPX had closed at 2053 yesterday. By 10am the SPX hit 2071, was extremely overbought, and began to pullback. The pullback found support at SPX 2057 around 1:30. Then after a choppy rising afternoon the market closed at SPX 2064.
For the day the SPX/DOW were +0.50%, and the NDX/NAZ were +0.25%. Bonds gained 5 ticks, Crude rose 75 cents, Gold added $6, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Today the WLEI was reported higher: 47.6% v 47.2%.
The market gapped up at the open today on a rate cut in China and more ECB talk of QE. By 10am the SPX hit the 2070 pivot and then started to pullback. The pullback bottomed just above Tuesday’s SPX 2056 high. Our long standing Q4 2014 target of SPX 2070 has been reached. We already have new targets, but will not publish them until January. After that low, the market went into a trading range for the rest of the day. The key level to watch heading into next week is SPX 2040. Short term support is SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum ended the day around neutral after hitting extremely overbought this morning. Best to your weekend!