SHORT TERM: gap up opening again, DOW +212
Overnight the Asian markets gained 0.7%. Europe opened higher and rallied 2.5%. US index futures were much higher overnight, and the market gapped up to SPX 2072 at the open. The market had closed at SPX 2051 yesterday. In the opening minutes the SPX hit 2076, then started to pullback. At 10am Wholesale inventories were reported higher: +0.8% v +0.4%. Around 10:30 the SPX hit 2067, and then began to rally again. At 11:30 the SPX hit 2079, then pulled back to 2074 by 12:30. At that time FED chair Yellen’s speech:http://www.federalreserve.gov/newsevents/speech/yellen20150710a.htm. After hitting SPX 2073 by 2pm the market rallied to 2081 by 3:30, then dipped to close at 2077.
For the day the SPX/DOW gained 1.20%, and the NDX/NAZ gained 1.55%. Bonds lost 26 ticks, Crude slipped 5 cents, Gold added $1, and the USD was lower. Medium term support rises to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported lower: 51.2% v 51.4%.
The market gapped up at the open for the second day in a row. This time, however, the market did not retrace most the of the gap up. In fact, it pulled back, and then rallied to a higher high. Thus far we have observed three waves up from the SPX 2045 low: 2074-2051-2081 so far, with a small subdivision of the third wave: 2076-2067-2081. With lots of economic events next week the market could get the catalysts to move higher. Short term support is at the 2070 pivot and SPX 2051, with resistance at the 2085 and 2131 pivots. Short term momentum hit slightly overbought and ended there. Best to your weekend!
MEDIUM TERM: uptrend trying to get underway
LONG TERM: bull market