SHORT TERM: gap up turnaround Tuesday, DOW +269
Overnight the Asian markets gained 0.1%. Europe opened higher and gained 2.4%. US index futures were higher overnight as well. At 8:30 Q1 GDP was reported higher: +1.1% v +0.8%, and at 9am Case-Shiller was reported unchanged at +5.4%. The market gapped up at the open to SPX 2019 and continued higher. The market had closed at SPX 2001 yesterday. At 10am the SPX hit 2027 and Consumer confidence was reported higher: 98.0 v 92.6. After that it pulled back to SPX 2016 by 11:30. Another rally followed which carried the SPX to 2036, where it closed. Volatile market!
For the day the SPX/DOW gained 1.7%, and the NDX/NAZ gained 2.1%. Bonds gained 2 ticks, Crude rallied $1.60, Gold slid $13, and the USD was lower. Medium term support rises back to the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Tomorrow: Personal income/spending and PCE process at 8:30, then Pending home sales at 10am.
Yesterday we had noted three waves down from the recent SPX 2113 high: 2055-2073-1992. We also noted the third wave had subdivided into five waves, which ended with a positive divergence: 2033-2049-1992-2006-1992. And the market had already reversed off that low to SPX 2004. Today the market gapped up and did three waves up: 2027-2016-2036. Should the market continue higher to the 2043 pivot tomorrow, we have probably seen the completion of three Minor waves down from the uptrend high at SPX 2121: 2050-2113-1992. This would suggest the rally could continue to the 2070 pivot before heading lower again. If the market fails to reach that pivot, it will probably make new downtrend lows first before rallying to the 2070 pivot. Short term support is at the 2019 and 1973 pivots, with resistance at the 2043 and 2070 pivots. Short term momentum rose from a positive divergence to overbought. Best to your trading!
MEDIUM TERM: downtrend
LONG TERM: neutral