SHORT TERM: rally continues, DOW +76
Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.4%. US index futures were lower overnight. At 8:30 Retail sales were reported lower: -0.3% v +1.2%, and Export (-0.1% v +0.7%)/Import (-0.2% v 0.0%) prices were also reported lower. The market opened two points below yesterday’s SPX 2100 close and then started to rally. At 10am Business inventories were reported higher: +0.3% v +0.4%. The rally continued until noon when the SPX hit 2109. Then after a small three point pullback by 1pm the market moved higher. Nearing 3:30 the SPX hit 2112, then pulled back another three points to close at 2109.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.65%. Bonds gained 10 ticks, Crude rose 70 cents, Gold slipped $2, 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 PPI and NY FED at 8:30, Industrial production (est. +0.1%) at 9:15, Congressional testimony from FED chair Yellen at 10am, then the FED’s beige book at 2pm.
The market opened slightly lower today, ignored the slight negative short term divergence, then continued higher. The lower open ended the three day streak of gap up openings, and the market rallied without any overnight influence for the first time since the SPX 2045 low. We continue to observe three waves up from that low: 2074-2051-2112. Today we posted the two lower levels on the hourly chart. Lots of economic activity tomorrow, which could create some volatility short term. We would expect the next notable pullback, however, to be just wave 4 of a five wave rally to kickoff the new uptrend. Short term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Short term momentum is again displaying a slight negative divergence, with again no important pullback yet. Best to your trading!
MEDIUM TERM: potential uptrend continues to rise
LONG TERM: bull market