SHORT TERM: gap up opening, DOW +76
Overnight the Asian markets lost 0.3%. Europe opened lower but gained 0.3%. US index futures were higher overnight as earnings season got underway. At 8:30 the NY FED was reported contracting: -1.2 v +6.9, and at 9:15 Industrial production was lower: -0.6% v +0.1%. The market gapped up at the open to SPX 2104, then rose to 2109 just before 10am. At 10am the NAHB was reported higher: 56 v 53. At 11:30 the SPX hit 2103, and then resumed the rally. At 2pm the FED released its Beige book: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201504.htm. At 3pm the SPX hit 2112, then pulled back to close at 2107.
For the day the SPX/DOW gained 0.45%, and the NDX/NAZ gained 0.65%. Bonds gained 5 ticks, Crude rallied $2.65, Gold rose $10, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: weekly Jobless claims and Housing starts at 8:30, then the Philly FED at 10am.
The market gapped up at the open for the first time in over two weeks (March 30th). That gap up opening carried the SPX to 2089 by 3:30, then two days later it was at 2048. Today’s rally carried the SPX to 2112 by 3pm. Also of note, the SPX closed over 2100, the DOW closed over 18,000 and the NAZ closed over 5,000 again. The only two times this type of event occurred was the beginning of March, which led to the SPX 2040 low, and the middle of March, which lead to the SPX 2046 low. Inflection point?
We continue to see this advance, from SPX 2048, as choppy: 2072-2057-2090-2073-2088-2074-2108-2083-2112. One in our group suggested the 2073-2088-2074 was a failed flat and the rally is impulsing. Possible. Let’s see how the market handles the remainder of this week. Short term support remains at the 2085 and 2070 pivots, with resistance at SPX 2115 and SPX 2120. Short term momentum is displaying a slight negative divergence. Best to your trading!
MEDIUM TERM: still an uptrend
LONG TERM: bull market