SHORT TERM: gap up week so far, DOW +185
Overnight the Asian markets gained 0.7%. Europe opened higher and gained 2.4%. US index futures were higher overnight. At 8:30 Durable goods were reported flat, PCE prices were reported higher: +0.1% v 0.0%, and Personal income (+0.3% v +0.4%)/spending (+0.3% v +0.1) was reported higher. The market gapped up at the open to SPX 2052 and continued to rally. The market had closed at SPX 2039 yesterday. At 10am Consumer sentiment was reported higher: 92.6 v 91.8, and New home sales were reported lower: 490K v 495K. The rally continued with small pullbacks along the way into the afternoon. At 2:30 the SPX hit 2065, dipped to 2060 by 3:30, then bounced to close at 2064.
For the day the SPX/DOW gained 1.15%, and the NDX/NAZ gained 0.85%. Bonds lost 5 ticks, Crude rallied $1.65, Gold slipped $3, and the USD was higher. Medium term support remains at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots. Tomorrow, a half day of trading: weekly Jobless claims at 8:30.
The market gapped up at the open for the third day in a row this week. Yesterday’s market activity seemed to have set the tone as the market closed above where it had opened for the first time in three days. If Monday’s SPX 2006 low was the end of the downtrend it was a failed Minor c wave. The only index that made a lower low, and got sufficiently oversold, was the DOW. From Monday’s low we currently have an impulsive five waves up: 2017-2008-2030-2020-2065. Should the market continue to move higher tomorrow we are likely to get a WROC signal, suggesting an uptrend is indeed underway. Our last WROC signal occurred at the beginning of October. Short term support is now at SPX 2042 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum is currently in a stratospheric overbought condition. A pullback can occur at any time. Best to your holidays!
MEDIUM TERM: uptrend may be underway
LONG TERM: bull market