SHORT TERM: gap up opening as Europe rallies, DOW +230
Overnight the Asian markets gained 0.8%. Europe opened higher and gained 2.0%. US index futures were higher overnight. At 8:30 weekly jobless claims were reported lower: 259K v 277K. The market gapped up at the open to SPX 2101, ticked up to 2103, and then pulled back to 2098 by 10am. At 10am Leading indicators were reported lower: -0.2% v +0.6%, and New home sales were lower: 551K v 619K. The market then reversed and started to move even higher. By noon the SPX had reached 2108. Then after a pullback to SPX 2103 by 2pm, the market rallied to close at 2113.
For the day the SPX/DOW gained 1.3%, and the NDX/NAZ gained 1.5%. Bonds lost 17 ticks, Crude rose 90 cents, Gold slid $8, and the USD was lower. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Tomorrow: durable goods orders at 8:30, then consumer sentiment at 10am.
The market gapped up at the open today for the second time this week. Unlike Monday’s gap up, this rally moved higher rather than being sold off soon after the open. With today’s rally, and SPX 2080 not getting breached during this week’s pullbacks, we now have five waves up from last week’s SPX 2050 low: 2080-2063-2101-2085-2113. Pullback next, regardless of the outcome of the UK vote? Possible, since most are positioned for a ‘remain’ outcome: FTSE up 5+% already this week. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2121 and the 2131 pivot. Short term momentum ended the day quite overbought. Best to your trading the results of the UK vote!
MEDIUM TERM: uptrend
LONG TERM: neutral