SHORT TERM: gap down opening reversed, DOW +200
Overnight the Asian markets gained 1.6%. Europe opened higher and gained 0.7%. US index futures were higher overnight until the Payrolls report was released at 8:30: +142k v +173k. The futures market immediately sold off and the market opened with a gap down to SPX 1901. The market had closed at SPX 1924 yesterday. By 10am the SPX had declined to 1894, and Factory orders were reported lower: -0.7% v +0.4%. The market then started to rebound. The rebound gradually turned into a rally. Just before 1pm the SPX had closed the gap and hit 1936. Then it declined to SPX 1927 by 1:30 when FED vice chair Fischer’s speech: http://www.federalreserve.gov/newsevents/speech/fischer20151002a.htm. The market then resumed its rally and hit SPX 1951 at the close.
For the day the SPX/DOW were +1.35%, and the NDX/NAZ were +1.75%. Bonds gained 20 ticks, Crude rose 90 cents, Gold rallied $23, and the USD was lower. Medium term support rises to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Yesterday Q3 GDPn was lowered: +0.9% v +1.8%. Today the WLEI was reported higher: 48.3% v 48.1%.
The market gapped down at the open today, traded near the lows for about a half hour, then took off to the upside like the gap down never happened. In the afternoon the market closed the opening gap, took out yesterday’s SPX 1927 high, and continued on into the low-1950’s. Quite a reversal. From Tuesday’s SPX 1872 low we have three waves up to 1927, three waves down to 1894, and now one wave to 1951. Generally this looks like a corrective rally. But one could force an impulse wave out of this choppy action. Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum dropped below neutral during the gap down, then reversed to quite overbought in the afternoon. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bull market