SHORT TERM: gap up opening, DOW -100
Overnight the Asian markets lost 1.1%. Europe opened higher and gained 1.3%. US index futures were higher overnight. Prior to the open FED chair Yellen’s congressional testimony was released, and then one half hour later FED vice chair Fischer’s speech: http://www.federalreserve.gov/newsevents/testimony/yellen20160210a.htm, http://www.federalreserve.gov/newsevents/speech/fischer20160210a.htm. The market gapped up at the opening to SPX 1865. The market had closed at SPX 1852 yesterday. After a dip to SPX 1860 in the opening moments the market rallied to 1882 by 10:30, after the testimony began. Then the market dropped to SPX 1858 by 11:30. The market tried to rally again and hit SPX 1875 by 1:30, but then started to pullback. At 2pm the Budget deficit was reported as a surplus: +$55.2B v -$14.4B. The decline continued into the close, when the SPX hit 1850 then ticked up to close at 1852.
For the day the SPX/DOW were -0.30%, and the NDX/NAZ were +0.40%. Bonds gained 11 ticks, Crude lost 60 cents, Gold rose $9, and the USD was lower. Medium term support remains at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Tomorrow: weekly Jobless claims at 8:30, and FED chair Yellen resumes her testimony with the Senate at 10am.
The market had its eleventh gap opening in the past twelve trading days today. This time around it was up after three straight gap down openings. The market rallied to SPX 1882 by 10:30 and that was the high of the day. The rally from Monday’s SPX 1828 low to today’s high was quite corrective SPX: 1862-1835-1882. And it looked quite similar to the recent SPX 1872-1927 rally, including the number of points gained, i.e. 55 points. After today’s high the market started stair-stepping down again SPX: 1858-1875-1850. If this counter rally is done, as it appears, an attempt to break the lows should be next. Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Short term momentum did hit overbought during today’s rally then dropped below neutral. Best to your trading this volatile market!
MEDIUM TERM: downtrend
LONG TERM: bear market