SHORT TERM: gap up opening, DOW +168
Overnight the Asian markets gained 1.1%. Europe opened higher but lost 0.5%. US index futures were higher overnight and the market gapped up at the opening to SPX 2089. The market had closed at SPX 2080 yesterday. In the opening minutes the rally continued until SPX 2099, and then the market started to pullback. At 10am Construction spending was reported higher: +1.0% v +0.6%, and ISM manufacturing was reported lower: 48.6 v 50.1. The pullback was a sharp one as the SPX dropped to 2087 just past 10am. Then the market worked its way higher, hitting SPX 2103 in the last hour of trading, and closed there.
For the day the SPX/DOW gained 1.0%, and the NDX/NAZ gained 1.0%. Bonds gained 18 ticks, Crude added 5 cents, Gold rose $4, and the USD was lower. Medium term support rises back to the 2085 and 2070 pivots, with resistance at the 2131 and 2145 pivots. Tomorrow: ADP at 8:15, a speech from FED governor Powell at 9am, a speech from FED chair Yellen at 12:30, then the FED’s Beige book at 2pm.
The market gapped up at the open today for the first time in six trading days. The rally that followed took the SPX above the recent 2080-2094 trading range, but the market quickly pulled back into that range just after 10am. After that the market worked its way higher for the rest of the day, hitting SPX 2103 in the last hour of trading. Its highest level since November 5th. We continue to maintain the count as posted: i-ii-1-2-3. This third wave, however, needs to start acting like one or else we will be forced to consider an alternative. Short term support rises to the 2085 and 2070 pivots, with resistance at SPX 2116 and the 2131 pivot. Short term momentum ended the day overbought. Best to your Beige book trading!
MEDIUM TERM: uptrend
LONG TERM: bull market