SHORT TERM: gap up opening breaks streak, DOW +63
Overnight the Asian markets lost 0.9%. Europe opened higher, were disappointed with the TLTRO results, and ended mixed. US index futures were higher overnight, and greatly improved after several economic reports. At 8:30 weekly Jobless claims were reported lower: 294k v 297k, Retail sales were higher: +0.7% v +0.3%, and Export (-1.2% v -0.9%)/Import prices (-0.2% v -0.2%) were lower. The market gapped up at the open to SPX 2036 and continued to rally. The SPX had closed at 2026 yesterday. At 10am Business inventories were reported higher: +0.2% v +0.3%. The rally continued, with very small pullbacks, to SPX 2056 by noon. Then the market started to pullback. By 3pm the SPX had dropped back to the opening level at SPX 2036. After a rally to SPX 2046 by 3:30, it dropped to 2031, then bounced to close at 2035.
For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.50%. Bonds lost 7 ticks, Crude dropped $1.20, Gold slipped $2, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: the PPI at 8:30, then Consumer sentiment at 10am.
The market gapped up at the open today, breaking the three day gap down streak but it was still a gap. Normally, multiple gaps mostly to the downside suggest a correction is underway. The gap up opening carried the market to SPX 2056 by noon, nearly a perfect 61.8% retracement of the 55 point decline: 2079-2024. When the market started to pullback in the afternoon we updated the hourly chart to display a Minor a at SPX 2024, and a Minor b possibly at 2056. As long as SPX 2056 is not exceeded tomorrow, Minor c should be underway. Short term support remains at the medium term pivots. Short term momentum nearly hit overbought today after yesterday’s positive divergence, then ended the day approaching oversold. Best to your Friday trading!
MEDIUM TERM: uptrend may have topped
LONG TERM: bull market