SHORT TERM: gap up opening starts the week, DOW +165
Overnight the Asian markets lost 1.2%. Europe opened lower but gained 0.5%. US index futures were lower overnight and then reversed. The market gapped up at the open to SPX 2084, dipped a couple of points, and then continued higher. The SPX had closed at 2079 on Friday. At 10am ISM manufacturing was reported lower: 50.1 v 50.2, and Construction spending was reported higher: +0.6% v +0.7%. The market continued to rally, with only a 4 point pullback, into the afternoon to new uptrend highs. At 3:30 the SPX hit 2106 then pulled back to close at 2104.
For the day the SPX/DOW gained 1.05%, and the NDX/NAZ gained 1.30%. Bonds lost 10 ticks, Crude slid 45 cents, Gold dropped $7, and the USD was lower. Medium term support rises to the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: Factory orders and Auto sales at 10am.
After being down about 8 points in overnight trading, futures rallied into the open and the market gapped up five points from Friday’s close. By late morning the SPX made a new uptrend high at 2095 and continued to rally into the afternoon. With the new high the Minor wave 5 rally from SPX 2059 is starting to look better: 2085-2063-2094-2079-2106. It could be an ending diagonal, or subdividing into 9 waves of its own. An ED would suggest a 30+ point pullback would be next. A subdivision would suggest SPX 2120 should be hit this week. The key level is now SPX 2093. Should the market hit that level Minor 5 has probably completed. As long as the market holds above that level Minor 5 can continue to work its way higher. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum was quite overbought, after Friday’s oversold, and ended there. Best to your Tuesday trading!
MEDIUM TERM: uptrend
LONG TERM: bull market