SHORT TERM: gap up and go Tuesday, DOW +156
Overnight the Asian markets lost 0.4%. Europe, however, opened higher and gained 2.9%. US index futures were much higher overnight. At 8:30 the NY FED was reported lower: -4.6 v -10.7, and the CPI was reported unchanged. The market gapped up at the open to SPX 2042 and continued to rally. In the opening minutes the SPX hit 2050, then started to pullback. At 10am the NAHB was reported lower: 61 v 62. The pullback ended at SPX 2039 around 11:30, and the market resumed its rally. Around 12:30 the SPX hit 2054, and then began to pullback. Nearing the close the SPX hot 2042, then ticked up to close at 2043.
For the day the SPX/DOW gained 1.00%, and the NDX/NAZ gained 0.75%. Bonds lost 12 ticks, Crude rallied 80 cents, Gold slipped $2, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow: Building permits and Housing starts at 8:30, Industrial production at 9:15, then the FED concludes its FOMC meeting at 2pm.
The market gapped up at the open today and continued to rally into midday. This was a bit of a surprise as we somewhat expected an inside day today, so that the rest our technical indicators would align. The market, however, obviously had other intentions off the SPX 1993 50% retracement low. The rebound in Crude did not hurt either. With the two day rally reaching 60+ points, it is now the best rally since the downtrend began. Thus far the rally looks impulsive in the SPX, but only four waves: 2018-2006-2054-2042?. The next two/three days, however, could be quite volatile with the FED and year end options expiration. Short term support is at SPX 2034/37 and the 2019 pivot, with resistance at SPX 2050/56 and the 2070 pivot. Short term momentum hit quite overbought at today’s high then began to decline. Best to your trading on the often volatile FOMC statement!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bull market