SHORT TERM: lower open then rally, DOW + 178
Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.5%. US index futures were higher overnight, but pulled back heading into the open. At 8:30 weekly jobless claims were reported higher: 269K v 268K, retail sales were reported lower: -0.3% v 0.0%, the PPI was reported flat, the Philly FED was reported higher: 12.8 v 2.0, and the NY FED was reported lower: -2.0 v -4.2. At 9:15 industrial production was reported lower: -0.4 v 0.7, and capacity utilization was reported lower: 75.5% v 75.9%. The market opened, after all that, two points below yesterday’s SPX 2126 close. In the opening minutes it bounced to SPX 2129, pulled back to 2122, and then started to rally. At 10am business inventories were reported unchanged. The rally continued to 11:30 when the SPX hit 2145. Then after a pullback to SPX 2138 the market moved even higher. At 2:30 the SPX hit 2151, then dipped to close at 2147.
For the day the SPX/DOW gained 1.0%, and the NDX/NAZ gained 1.5%. Bonds ended flat, Crude rose 25 cents, Gold dropped $8, and the USD was lower. Medium term support rises to the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Today the Q3 GDP est. was lowered to 3.0% v 3.3%. Tomorrow: options expiration, the CPI at 8:30, then consumer sentiment at 10am.
The market opened slightly lower today, bounced around early, and then rallied to SPX 2151. This was exactly the positive response expected if Wednesday’s low had ended the downtrend at SPX 2120. We noted yesterday the pattern looked like a zigzag followed by a flat, with both structures ending at SPX 2119/2120. If this is the case, the 2131 pivot should now act as support on any pullbacks, and, the NDX will make a new high before any of the other major indices. As long as these occur a new uptrend is probably underway. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum headed higher off yesterday’s positive divergence, and ended the day overbought. Trade what’s in front you!
MEDIUM TERM: new uptrend underway?
LONG TERM: uptrend