SHORT TERM: gap up and go Friday, DOW +396
Overnight the Asian markets gained 2.4% on the BOJ’s venture into negative rates. Europe opened higher and gained 2.1%. US index futures were much higher overnight. At 8:30 Q4 GDP was reported in line with expectations: +0.7% v +2.0%. The market gapped up to SPX 1900 at the open and continued to rally. The market had closed at SPX 1893 yesterday. At 9:45 the Chicago PMI was reported higher: 55.6 v 42.9, (one of these numbers is probably wrong), and at 10am Consumer sentiment was reported lower: 92.0 v 93.3. The market continued to rally until just past 10am when the SPX hit 1918. After a pullback to SPX 1910 by 10:30 the market moved even higher. The rally continued throughout the day, and the SPX hit 1940 and closed there.
For the day the SPX/DOW gained 2.45%, and the NDX/NAZ gained 2.30%. Bonds rose 19 ticks, Crude gained 40 cents, Gold added $4, and the USD was higher. Medium term support jumps to the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Today the WLEI was reported lower: 48.0% v 48.1%.
The market had its fourth gap opening in a row today: 3 UP, 1 DN. The market opened at SPX 1900, hit 1918, dipped to 1910, and hit 1940 – it’s highest level since this potential uptrend began at 1812 seven trading days ago. After the market hit SPX 1917 on Wednesday, the FOMC statement created a lot of choppy activity into Thursday. We noted four potential short term counts at that time, and today settled on one: Intermediate C still underway. We updated the SPX hourly chart accordingly. More on this in the weekend update. Best to your weekend!
MEDIUM TERM: potential uptrend inflection point cleared
LONG TERM: bear market