SHORT TERM: gap up and go, DOW +211
Overnight the Asian markets gained 3.6%. Europe opened higher and gained 2.4%. US index futures were higher overnight, and the market gapped up to SPX 1896 at the open. The market had closed at SPX 1869 yesterday. At 10am Existing home sales were reported higher: 5.46M v 4.76M, and Leading indicators were reported lower: -0.2% v +0.4%. The market continued higher until 10:30 when the SPX hit 1907. Then after a pullback to SPX 1891 by 11:30 the market rallied to 1909 just past 2pm. A pullback followed to 1899, then the market rallied to end the week at 1907.
For the day the SPX/DOW gained 1.65%, and the NDX/NAZ gained 2.75%. Bonds lost 11 ticks, Crude rallied $2.70, Gold slid $5, and the USD was higher. Medium term support now rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Today the WLEI was reported lower: 48.1% v 48.5%, and the Q4 GDP estimate was reported higher: +0.7% v +0.6%.
Wild week! After opening on Tuesday at SPX 1901 the market dropped to 1812 by Wednesday. Yet after today’s gap up opening the market has made the round trip back to where it started ending at SPX 1907. Yesterday we noted a seven wave sequence up from the recent SPX 1812 low to 1890, then a drop to SPX 1860. After that we have rallied: 1877-1865-1907-1891-1909. If we tentatively count the rally to SPX 1890 as Minor a, the decline to SPX 1860 as Minor b, we are currently in Minor c of Intermediate wave A, of a Major wave B uptrend. More on this in the weekend update. That daily RSI positive divergence certainly has kicked off a good rally. Best to your weekend!
MEDIUM TERM: uptrend may be underway
LONG TERM: bear market