SHORT TERM: gap up turnaround, DOW +282
Overnight the Asian markets lost 2.5%. Europe opened lower but gained 0.5%. US index futures were sharply lower, China lost 6+%, then rebounded with a rally in Crude. At 9am Case-Shiller was reported higher: +5.8% v +5.5%, and the FHFA was reported higher: +0.5% v +0.5%. The market gapped up at the open to SPX 1888, ticked up to 1892, then pulled back to 1882 by 10am. At 10am Consumer confidence was reported higher: 98.1 v 96.5. The market then rallied to SPX 1907 by 1:30. After that the market pulled back to SPX 1896 just past 3pm, then bounced to close at 1904.
For the day the SPX/DOW gained 1.60%, and the NDX/NAZ gained 1.00%. Bonds gained 5 ticks, Crude rose 90 cents, Gold rallied $12, and the USD was lower. Medium term support rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: New home sales at 10am, then the FOMC statement at 2pm.
The market gapped up at the open today, rallied to SPX 1892, pulled back, then hit 1907. A big rally considering China lost over 6% today. Yesterday we noted the market appeared to be in Intermediate wave B. The decline from SPX 1909 on Friday was three waves: 1889-1903-1876. We offered three support levels SPX: 1872, 1861 and 1849. The top two suggested the 1869 pivot range. The high end of that range occurred just before yesterday’s close. Despite today’s rally we are not convinced Intermediate B ended at SPX 1876, until the SPX clears 1909. Bear markets are quite volatile, and the FOMC meeting ends tomorrow. Short term support is at the 1901 and 1869 pivots, with resistance a the 1929 and 1956 pivots. Short term momentum neared overbought after yesterday’s oversold condition. Best to your trading FED day!
MEDIUM TERM: potential uptrend underway
LONG TERM: bear market