SHORT TERM: gap up opening starts week, DOW +390
Monday and overnight the Asian markets gained 0.2%. Europe opened higher both days and gained 1.9%. US index futures were higher overnight and the market gapped up at the open to SPX 1949. The market had closed at SPX 1921 on Friday. In the opening minutes the market rallied to SPX 1961. Then after a pullback to SPX 1947 by 10:30 the market headed higher. At 3pm Consumer credit was reported higher: $19.1bn v $20.7bn. The afternoon advance continued into the closing minutes, when the SPX hit 1970 and closed at 1969.
For the day the SPX/DOW were +2.45%, and the NDX/NAZ were +2.80%. Bonds lost 15 ticks, Crude slipped 15 cents, Gold was flat and the USD was lower. Medium term support rises to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots.
Today the market had its fourteenth consecutive gap opening to start the week. The market remains quite volatile, as there was a 30 point ES range in holiday trading which expanded to a 40 and then 50 point range during today’s trading. Several possibilities exist for the rally from the Minor wave A low at SPX 1867. Minor B completed at SPX 1993, Minor B is forming a triangle should the SPX remain below 1975 before heading lower, and Minor wave B is still underway. In this volatile market any one of three could work, before the market heads back towards the lows. Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 pivot and SPX 1993. Short term momentum was quite overbought during today’s advance. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: bull market