SHORT TERM: turnaround Tuesday gap up opening, DOW +140
After the close yesterday FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20150209a.htm. Overnight the Asian markets were mixed. Europe opened higher and gained 0.5%. US index futures were higher overnight, and the market gapped up at the open to SPX 2056. The SPX had closed at 2047 yesterday. In the opening minutes the market ticked up to SPX 2058, then pulled back to 2049 by 10am. At 10am Wholesale inventories were reported marginally higher: +0.1% v +0.8%. After that pullback the market moved even higher. Around 3:30 the SPX hit 2071, then dipped to close at 2069.
For the day the SPX/DOW were +0.95%, and the NDX/NAZ were +1.40%. Bonds lost 8 ticks, Crude dropped $2.30, Gold slid $7, 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 Budget deficit at 2pm.
The market had another gap up opening today, the sixth of seven trading days this month. The rally stopped first at SPX 2058, dipped to 2049, then went right to the 2070 pivot range. The WROC again did its job, as the SPX is now in a confirmed uptrend. Probabilities now suggest, using WROC statistics again, the market is headed to new highs. There is, however, a much lesser probability suggesting this uptrend is the D wave of a Major wave 4 triangle. This would suggest the uptrend could reverse into a downtrend soon, with support around SPX 2000, to complete wave E. We will place the line in the sand, so to say, at yesterday’s SPX 2042 low. A break below it would suggest a potential E wave is underway. Remaining above it suggests new highs, and probably much higher, shortly. Short term support is now at SPX 2049 and SPX 2042, with resistance at the 2070 and 2085 pivots. Short term momentum rose, after yesterday’s positive divergence, and hit quite overbought in the afternoon. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market