SHORT TERM: gap up and go day, DOW +192
Overnight the Asian markets lost 0.3%. Europe opened lower but gained 1.2%. US index futures were higher overnight. At 8:30 weekly Jobless claims were reported lower 264k v 265k, and the PPI was reported lower: -0.4% v +0.2%. The market gapped up at the open to SPX 2111 and continued to rally with only three point pullbacks along the way. The SPX had closed at 2098 yesterday. At 10:30 FED governor Powell’s speech was released: http://www.federalreserve.gov/newsevents/speech/powell20150514a.htm. Heading into the close the SPX hit 2121 and closed there.
For the day the SPX/DOW were +1.05%, and the NDX/NAZ were +1.45%. Bonds gained 13 ticks, Crude slid 75 cents, Gold rose $7, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the NY FED at 8:30, Industrial production (est. +0.1%) at 9:15, then Consumer sentiment at 10am. And, if Options expiration activity did not occur today, it will tomorrow.
The market gapped up at the open today but did not close the opening gap, as it had done the past two days. Today it just continued to rise from the opening to closing bell. Did options expiration come a day early again? Each Opex seems to have a big day, up or down, on Thursday or Friday of expiration. Nevertheless, the market took out yesterday’s high at the open, after three down days, and took out Monday’s SPX 2118 high in the afternoon. With today’s rally we stretched out the upper trend line on the hourly chart, and it now crosses at SPX 2130. Allowing for some potential overshoot in the ongoing diagonal triangle scenario, we feel the upper limit of this uptrend is the OEW 2131 pivot range (2124-2138). Anything more than that and we would be forced into looking for an alternative pattern. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2118/2121 and the 2131 pivot. Short term momentum ended the day extremely overbought. Best to your Friday trading!
MEDIUM TERM: still an uptrend
LONG TERM: bull market