SHORT TERM: gap up opening, DOW +184
Overnight the Asian markets open gained 0.1%. European markets open gained 0.4%. US index futures were higher overnight, and the market gapped up to SPX 2098 at the open. The market had closed at SPX 2086 yesterday. At 10am ISM manufacturing was reported unchanged: 51.5 v 51.5, Consumer sentiment was reported unchanged: 95.9 v 95.9, but Construction spending was reported lower: -0.6% v -0.1%. The market continued higher until it hit SPX 2102 around 10:30, then started to pullback. Just before 11am the SPX hit 2095, bounced back to 2102 by 11:30, then hit 2094 just before noon. After that it rallied to SPX 2108 by 2:30, dipped to 2102 by 3:30, then closed at 2108.
For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.40%. Bonds lost 17 ticks, Crude slipped 25 cents, Gold dropped $5, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Last night the FED reported a decrease in the Monetary base: $4.027tn v $4.167tn. Today the WLEI was reported higher: 49.9% v 49.3%.
The market gapped up at the open today for the fourth gap opening this week. This follows five gap openings last week, for a total of 10 gap openings during the last 11 days. For those keeping score there were 6 gap ups and 4 gap downs. The net progress during all this gapping activity is +3 points. The SPX had closed at 2105 before it all began. Typically this type of gapping activity occurs during a correction. Yet, the SPX/NAZ/NDX remain in uptrends, while only the DOW is in a confirmed downtrend. Today’s rally took the SPX to 2102, pulled back, then rose to 2108, less than 1% below the all time high. Despite today’s rally we are still not seeing much impulsive activity in the SPX. With this in mind, we took a closer look at our collection of charts/indicators and our findings were somewhat cautionary. More on this in the weekend report. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market