SHORT TERM: gap up, fade, then rally, DOW +164
Overnight the Asian markets gained 0.8%. Europe opened higher and gained 0.3%. US index futures were again higher overnight, and the market gapped up to SPX 2149 at the open. The SPX had closed at 2140 yesterday. At 10am the SPX hit 2152 and started to pullback. At noon the SPX closed the gap and hit 2140. Then the market started to rise ahead of the FOMC statements. At 2pm the FED released: http://www.federalreserve.gov/newsevents/press/monetary/20160921a.htm, and http://www.federalreserve.gov/newsevents/press/monetary/20160921b.htm. A few minutes after the statements the SPX hit 2154. Then it pulled back to SPX 2144 by 2:30. After that the market rallied to 2165 just before a 2163 close.
For the day the SPX/DOW gained 1.0%, and the NDX/NAZ gained 1.0%. Bonds gained 6 ticks, Crude rose $1.55, Gold rallied $19, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow: weekly jobless claims at 8:30, the FHFA at 9am, then existing home sales at 10am.
The market gapped up at the open for the third day in a row. And just like the previous two days, it rallied until 10am, then sold off the entire gap up opening. After that there was the usual FOMC volatility on the wildest day of the week. From last week’s SPX 2120 low we now see 8 overlapping waves and a rally above them all after today’s SPX 2140 low. Generally all this activity still looks corrective, however we still can not rule out a nesting of 1-2’s. Which would be an odd beginning to an uptrend. Short term support is at the 2131 and 2116 pivots, with resistance now at the 2177 pivot and SPX 2194. Short term momentum ended the day quite overbought. Trade what is in front of you!
MEDIUM TERM: uptrend potential back on the table
LONG TERM: uptrend