SHORT TERM: rally then pullback, DOW +6
Overnight the Asian markets gained 0.9%. Europe opened higher and gained 2.4%. US index futures were higher overnight as well. At 8:30 the CPI was reported higher: +0.2% v -0.2%, and at 9:15 Industrial production was reported lower: -0.2% v -0.2%. The market opened two points above yesterday’s SPX 2053 close, dipped to 2050 in the opening minutes, then rallied to 2067 by 11:30. At 10am the NAHB was reported lower: 62 v 64. After that high the market started to pullback. At 1:30 a speech from FED governor Powell: http://www.federalreserve.gov/newsevents/speech/powell20151117a.htm. The pullback continued until just after 3pm when the SPX hit 2046. At 3:30 FED governor Tarullo’s: http://www.federalreserve.gov/newsevents/speech/tarullo20151117a.htm, speech was released. Then the market bounced to close at SPX 2050.
For the day the SPX/DOW were mixed, and the NDX/NAZ ended flat. Bonds gained 1 tick, Crude dropped 95 cents, Gold slid $13, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Housing starts and Building permits at 8:30, then the FOMC minutes at 2pm.
The market opened slightly higher today, dipped, and then hit a rally high at SPX 2067. With this rally entering the 2070 pivot range, as noted yesterday, we updated the labeling for yesterday’s SPX 2019 low as the end of Major wave 4. Major wave 5 appears to be underway. The rally from SPX 2019 to 2067 fits within the boundaries of what was expected to kick off Major wave 5. The high can be labeled as a Minor 1 or Int. i of Major 5. We will go with Int. wave i until the market suggests a change. Posted that as well. The current pullback should be about 20+ points into the mid to lower SPX 2040’s. After it completes the uptrend should resume, taking the market to all time new highs. Short term support is at SPX 2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum hit extremely overbought today, then dropped below neutral. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: bull market