SHORT TERM: slightly higher then pullback, DOW -3
Overnight the Asian markets gained 0.3%. Europe opened lower but gained 0.2%. US index futures were higher overnight. At 8:30 the PPI was reported higher: +0.3% v +0.4%, the NY FED was reported higher: +3.9 v -2.0, and FED chair Yellen’s testimony: http://www.federalreserve.gov/newsevents/testimony/yellen20150715a.htm. Then at 9:15 Industrial production was reported higher: +0.3% v -0.2%. The market opened one point above yesterday’s SPX 2109 close, then immediately dipped to 2107 in the opening minutes. After that the market started to work its way higher and hit SPX 2114 by 11am. Then it started to pullback. At 2pm the FED’s beige book was released: http://www.federalreserve.gov/monetarypolicy/beigebook/beigebook201507.htm. By 3pm the SPX had hit 2102, then bounced to close at 2107.
For the day the SPX/DOW were -0.05%, and the NDX/NAZ were mixed. Bonds gained 11 ticks, Crude dropped $1.60, Gold slid $6, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ECB meets, weekly Jobless claims at 8:30, the Philly FED and NAHB at 10am, then FED chair Yellen continues her testimony in the Senate at 2:30.
The market bounced around in a narrow range at the open today then rallied to SPX 2114. A new high for the rally from last week’s SPX 2045 low. After that it set up a short term negative divergence, and with a little help from protesters in Greece, the market had its first notable pullback of the week down to SPX 2102. We continue to count three waves up from the SPX 2045 as posted on the hourly chart. Today’s pullback could possibly be the fourth wave, or another subdivision of the third wave. Tomorrow should give us that answer. If a fourth wave, the pullback could extend into the mid-2090’s before the rally resumes. Short term support remains at the 2085 and 2070 pivots, with resistance now at SPX 2114 and the 2131 pivot. Short term momentum displayed a negative divergence this morning, then declined to nearly oversold before bouncing the neutral at the close. Best to your trading!
MEDIUM TERM: potential uptrend makes higher high
LONG TERM: bull market