SHORT TERM: gap up, reverse, then rally, DOW +122
Overnight the Asian markets gained 1.4%. Europe opened higher and gained 0.3%. US index futures were higher overnight, and the market gapped up at the open to SPX 1990. The SPX had closed at 1980 yesterday. At 10:30 the SPX hit 1999 and then started to pullback. The pullback lasted for one hour as the SPX hit 1976, and then it started to rally again. At 2pm the SPX hit 1996. It then pulled back to SPX 1986 by 3pm, when Consumer credit was reported lower: $16.0B v $19.1B. After that it rallied into a SPX 1996 close.
For the day the SPX/DOW gained 0.75%, and the NDX/NAZ gained 0.75%. Bonds lost 10 ticks, Crude slid 35 cents, Gold slipped $1, and the USD was flat. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots. Tomorrow: weekly Jobless claims at 8:30, then FOMC minutes at 2pm.
The market gapped up at the open today for the fourth time, in six days, since the SPX 1872 low. After an hour of trading, and hitting resistance at SPX 1999, the market then pulled back, closing the gap, and hit 1976. After that it worked its way higher into the close. Clearly the potential H&S pattern had no impact today, as the market completed five waves up from the recent SPX 1894 low (using the small swings). Or completed five waves up from the SPX 1872 low (using the larger swings). Either way this last week’s rally looks impulsive. Short term support remains at the 1973 and 1956 pivots, with resistance at SPX 2000 and the 2019 pivot. Short term momentum hit neutral after today’s negative divergence at the highs. Best to your “often volatile” FOMC trading tomorrow.
MEDIUM TERM: uptrend
LONG TERM: bull market