SHORT TERM: market rebounds, DOW +103
Overnight the Asian markets gained 0.4%. Europe opened higher and gained 0.4% as well. US index futures were higher overnight and the market opened at SPX 2056, three points above yesterday’s close. At 10am Construction spending was reported higher: +1.1% v -0.4%. As the market continued to rise, at 12pm FED governor Brainard’s speech: http://www.federalreserve.gov/newsevents/speech/brainard20141202a.htm. The market continued to work its way higher throughout the day with only three point pullbacks along the way. At 3pm the SPX hit 2069 and then started to pullback. Just before the close the SPX hit 2065, then bounced to close at 2067.
For the day the SPX/DOW were +0.60%, and the NDX/NAZ were +0.50%. Bonds lost 19 ticks, Crude dropped $1.65, Gold slid $14, and the USD was higher, Medium term support remains at the 2910 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the ADP index at 8:15, ISM services at 10am, and the FED’s beige book at 2pm.
The market opened three points higher at SPX 2056, then rallied until 3pm when it hit 2069. After that it pulled back some into the close. Today’s action suggests a possible subdivision is underway for Minor wave 5. Higher highs would support this scenario. However, a decline to SPX 2060 would be the first caution flag that the uptrend high occurred at 2076. If this is followed by a drop below 2050, and then a drop below 2040 a downtrend is probably underway. Best to your FED beige book trading!
MEDIUM TERM: uptrend
LONG TERM: bull market