SHORT TERM: gap up and go, DOW +314
Overnight the Asian markets lost 2.0%. Europe opened higher and gained 2.7%. US index futures were higher overnight as well. At 8:30 Export (-0.8% v -1.0%)/Import prices (-0.2% v -0.3%) were reported lower, and Retail sales were reported higher: +0.2% v -0.1%. The market gapped up at the open to SPX 1847, ticked up to 1848, then pulled back to the low of the day at 1838 by 10am. At 10am Business inventories were reported higher: +0.1% v -0.2%, and Consumer sentiment was reported lower: 90.7 v 92.0. The market then rallied to SPX 1859 by 11:30, pulled back to 1850 by 1:30, and then moved even higher. Heading into the close the SPX hit 1865 and closed there.
For the day the SPX/DOW gained 2.00%, and the NDX/NAZ gained 1.55%. Bonds lost 28 ticks, Crude rallied $2.75, Gold dropped $7, and the USD was higher. Medium term support rises to the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. Today the WLEI was reported lower 47.4% v 47.7%, and the Q1 GDPn was reported higher: +2.7% v +2.5%.
The market gapped up at the open today, pulled back, and then continued higher throughout the day. The rally in Crude and the rebound in the financial sector led the way. While several smaller waves can be counted from yesterday’s SPX 1810 low, we are simply counting this rally as three waves thus far: 1836-1822-1865. With China’s market opening for the first time in a week on Monday, and the US markets closed until Tuesday, it should be an interesting weekend. Enjoy it!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: bear market