SHORT TERM: another gap up opening, DOW +138
Overnight the Asian markets gained 0.9%. Europe opened higher and gained 1.8%. US index futures were higher overnight, and at 8:15 the ADP was reported higher: 237k v 201k. At 9am FED governor Brainard’s speech was released: http://www.federalreserve.gov/newsevents/speech/brainard20150701a.htm. The market gapped up at the open to SPX 2075 and continued to 2083 by 10am. At 10am ISM manufacturing was reported higher: 53.5 v 52.8, as well as Construction spending: +0.8% v +2.2%. The market then went into pullback mode. Just before 11am the SPX hit 2073. Then after a bounce to SPX 2078 by 11:30, it dipped to 2070 by 1pm, bounced to 2075 just before 2pm, then dropped to 2069 by 2pm. After that it rallied into a SPX 2077 close.
For the day the SPX/DOW were +0.75%, and the NDX/NAZ were +0.65%. Bonds lost 24 ticks, Crude dropped $2.40, Gold slipped $4, and the USD was higher. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Tomorrow: at 8:30 monthly Payrolls (est. +249k) and weekly Jobless claims, then at 10am Factory orders.
The market gapped up at the open for the second day in a row, exceeding yesterday’s high on its way to SPX 2083. This broke a six day streak of lower highs and lows. Plus, this suggests the decline from SPX 2130 to 2056 was an a-b-c zigzag to complete Minute wave a. The rally off that low also looks like an a-b-c: 2074-2062-2083. This Minute wave b could have completed at today’s high, or can bounce around before Minute wave c gets underway. Still looking for downtrend support around SPX 2040, or the 2019 pivot. Short term support is at the 2070 pivot and SPX 2056, with resistance at the 2085 and 2131 pivots. Short term momentum hit overbought today, declined, and then headed higher into the close. Best to your pre-holiday trading!
MEDIUM TERM: downtrend continues
LONG TERM: bull market