SHORT TERM: gap up and go rally, DOW +228
Overnight the Asian markets gained 0.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight. At 8:30 the NY FED was reported lower: 6.9 v 7.8, then at 9:15 Industrial production was reported higher: +0.1% v +0.2%, but Capacity utilization was reported lower: 78.9 v 79.4. The market gapped up at the open to SPX 2062 and continued to rally. The SPX had closed at 2053 on Friday. At 10am the NAHB was reported lower: 53 v 56. Around noon the SPX hit 2077, pulled back to 2072 by 1pm, then moved even higher. Heading into the close the SPX hit 2081 and closed there.
For the day the SPX/DOW were +1.30%, and the NDX/NAZ were +1.25%. Bonds gained 7 ticks, Crude slid $1.00, Gold ended flat, and the USD was lower. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: Building permits and Housing starts at 8:30.
The market gapped up at the open today, on a pullback in the USD and rumors that the FED will take a more dovish stance on short term rates. The rally continued throughout the day with only a 5 point pullback at midday. With the SPX clearing the OEW 2070 pivot range in the afternoon, we updated the tentative green Minor wave 2 label to dark blue. Minor wave 3 should be underway. The question now arises; how do we count the SPX 2040-2066-2041 activity between Wednesday and Friday. Since neither the SPX nor the DOW made a lower low, even though the retracement was extreme, we are going to count that activity as a first and second wave. The market is then in a third wave, of a lesser degree, of Minor wave 3. However, the market is getting extremely overbought short term, so a larger than five point pullback could happen at any time. Short term support is at the 2070 pivot and SPX 2051, with resistance at the 2085 pivot and SPX 2104. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market