SHORT TERM: gap up opening, DOW +121
Overnight the Asian markets gained 1.6%. Europe opened higher and gained 1.0%. US index futures were higher overnight. Before the open FED governor Tarullo’s speech: http://www.federalreserve.gov/newsevents/speech/tarullo20160712a.htm. The market gapped up at the open to SPX 2147, and continued to 2152 in the opening minutes. At 10am Wholesale inventories were reported higher: +0.1% v +0.6%. The market pulled back to SPX 2145 by 10:30 and then started to work its way even higher. At 12:30 the SPX hit 2155, then drifted down to close at 2152.
For the day the SPX/DOW gained 0.70%, and the NDX/NAZ gained 0.60%. Bonds lost 22 ticks, Crude rallied $2.00, Gold dropped $23, and the USD was lower. Medium term support remains at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: Export/Import prices at 8:30, then the FED’s beige book and the Budget deficit at 2pm. Today the Q2 GDP est. was lowered to +2.3% v +2.4%.
The market gapped up at the open today for the second time in the past three trading days. After hitting a new uptrend high at SPX 2155 the market backed off some into the close. Thus far we continue to see three waves up from the downtrend low at SPX 1992: 2109-2074-2155, with the third wave subdividing into three waves: 2109-2089-2155. Short term momentum is displaying a negative divergence, but the market has yet to have a notable pullback. Should this third was equal the first the SPX could reach the 2212 pivot before any substantial pullback. This uptrend currently appears to be on cruise control (very few sellers) just like the February-April uptrend. It could possibly rally as much as well. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend