SHORT TERM: another gap up opening, DOW +369
Overnight the Asian markets gained 2.2%. Europe opened higher and gained 3.4%. US index futures were higher overnight. At 8:30 Q2 GDP was reported higher: +3.7% v +2.3%, and weekly Jobless claims were lower: 271k v 277k. The market gapped up at the open to SPX 1963 and rose to 1972 in the opening minutes. After a pullback to SPX 1960 by 10am the market moved higher again. At 10am Pending home sales were reported higher: +0.5% v -1.8%. The rally continued until 1pm when the SPX hit 1990, then the market started to pullback. The pullback ended at SPX 1948 by 3pm, then the market rallied into at 1988 close.
For the day the SPX/DOW were +2.35%, and the NDX/NAZ were +2.45%. Bonds lost 4 ticks, Crude rallied $4.15, Gold was flat, and the USD was higher. Medium term support rises to the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: Personal income/spending and PCE prices at 8:30, then Consumer sentiment at 10am.
The market gapped up at the open for the third day in a row today. Opened 20 points above yesterday’s close, rallied another 30 points closing Monday’s gap down opening, dropped 40 points in the afternoon, and then got most of that back before the close. So far this week the market has dropped 100 points, rallied 90 points, gave back that 90, and then rallied 120 points. This market is still quite volatile and potentially vulnerable. So far it looks like the market has done nearly five waves up from Tuesday’s SPX 1867 low: 1915-1880-1990-1948-1988, but we can only quantify three waves. Nothing convincing either way yet. Count remains unchanged. Short term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Short term momentum was quite overbought today, dipped to neutral, then closed overbought. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market