SHORT TERM: rally continues, DOW +89
Overnight the Asian markets gained 0.5%. Europe opened lower but gained 0.2%. US index futures were lower overnight and the market opened four points below yesterday’s SPX 2104 close. After a dip to SPX 2098 the market started to rally. At 10am Factory orders were reported lower: -1.0% v -1.7%, but Auto sales were reported higher. The rally continued into the afternoon with the SPX hit 2116 around 2:30. Then the market pulled back to SPX 2108 near the close, and bounced to 2110 at the close.
For the day the SPX/DOW were +0.40%, and the NDX/NAZ were +0.35%. Bonds lost 7 ticks, Crude rallied $1.50, Gold dropped $16, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Tomorrow: the ADP at 8:15, Trade deficit at 8:30, ISM services and congressional testimony from FED chair Yellen at 10am, then a speech from FED vice chair Fischer at 7:30pm.
The market opened lower today, dipped to SPX 2098, then started to rally to a higher uptrend high. With today’s price extension of Minor wave 5, and SPX 2093 not neared, the rally from SPX 2059 looks a lot more impulsive: 2085-2063-2094-2079-2116. This pattern suggests there are several small waves still needed to complete Minor 5. Market might start to get choppy over the next several days. SPX 2094 now becomes the downside limit to keep the Minor 5 rally underway. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2120 and the 2131 pivot. Short term momentum again hit quite overbought during today’s rally. Best to your “testimony” trading!
MEDIUM TERM: uptrend
LONG TERM: bull market