SHORT TERM: another gap up and go day, DOW +257
Overnight the Asian markets lost 0.5%. But Europe opened higher and gained 2.8%. US index futures followed Europe and were higher overnight. At 8:30 the PPI was reported higher: +0.1% v -0.2%, Housing starts were reported lower: 1099K v 1149K, and Building permits were reported lower: 1202K v 1232K. Then at 9:15 Industrial production was reported higher: +0.9% v -0.4%, and Capacity utilization was reported higher: 77.1% v 76.5%. The market gapped up at the open to SPX 1910 and continued to rally. The SPX had closed at 1896 yesterday. The rally continued until 12:30 when the SPX hit 1928. Then after a small pullback to SPX 1923 by 2pm the FED released the FOMC minutes: http://www.federalreserve.gov/newsevents/press/monetary/20160217a.htm. The market then rallied to SPX 1931 before having a larger pullback. At 3:30 the market hit SPX 1923, then bounced to close at 1927.
For the day the SPX/DOW gained 1.60%, and the NDX/NAZ gained 2.25%. Bonds lost 13 ticks, Crude rallied $1.60, Gold rebounded $7, and the USD was lower. Medium term support rises to the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Tomorrow: weekly Jobless claims and the Philly FED at 8:30.
The market gapped up at the open for the third day in a row. This time gapping right over the OEW 1901 pivot, after closing at SPX 1896 yesterday. The market has now had gap up openings over three consecutive pivots: 1841, 1869 and 1901. The SPX then rallied to the 1929 pivot in the afternoon and ended the day below it. This has been quite an interesting three trading days, since the SPX 1810 low late last Thursday. We continue to count five Minor waves up from that low: 1836-1822-1888-1875-1931. At today’s high short term momentum was displaying a very slight negative divergence, and the daily RSI has just hit overbought. This suggests a more substantial pullback, possibly back to the SPX 1880’s, could be next. Short term support is at the 1901 and 1869 pivots, with resistance at the 1929 and 1956 pivots. Best to your trading!
MEDIUM TERM: uptrend likely underway
LONG TERM: bear market