SHORT TERM: gap up opening sold, then rebound, DOW +4
For the start of the week Asian markets gained 1.5%. Europe opened higher and gained 1.0%. US index futures were higher overnight and the market gapped up to SPX 2027 at the open. The SPX had closed at 2019 on Friday. After a few minutes the SPX hit 2029 and then started to pullback. At 10am FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20150120a.htm, and the NAHB was reported flat: 57 v 57. The market then dropped to SPX 2010 by 10am, bounced to 2018 by 10:30, then hit 2004 by noon. After that the market started to rally. Around 3:30 the SPX hit 2026, then pulled back to close at 2023.
For the day the SPX/DOW were +0.10%, and the NDX/NAZ were +0.55%. Bonds gained 2 ticks, Crude lost $2.45, Gold rallied $17, and the USD was higher. Medium term support rises to the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Housing starts and Building permits at 8:30.
The market gapped up at the open to start the week, but immediately sold off. Around noon the SPX had declined 25 points from the opening high to 2004, and then started to rally. The rally nearly retraced the entire morning decline, as the SPX got back to 2026. Currently we can count one wave up from SPX 1988 to 2029, a pullback to 2004, then another rally. If the market can take out this morning’s SPX 2029 high this could suggest the uptrend has resumed, and we will label the recent 1988 low as the end of Minute wave ii. Short term support is at the 2019 pivot and SPX 2004, with resistance at SPX 2029 and then SPX 2057. Short term momentum dropped to neutral during the pullback, from overbought, and ended the day at overbought. Best to your trading!
MEDIUM TERM: uptrend trying to resume
LONG TERM: bull market