SHORT TERM: gap up opening, DOW +165
Overnight the Asian markets lost 1.1%. Europe opened lower but gained 0.3% when Deutsche Bank’ stock reversed higher. US index futures were higher overnight. At 8:30 personal income (0.2% v 0.4%)/spending (0.0% v 0.3%) were reported mixed, and PCE prices were higher: 0.2% v 0.1%. The market gapped up at the open to SPX 2165, then dropped to 2158 just before 10am. The SPX had closed at 2151 yesterday. At 9:45 the Chicago PMI was reported higher: 54.2 v 51.5, then at 10am consumer sentiment was reported higher: 91.2 v 89.8. The market then resumed its rally into the afternoon, hitting SPX 2175 by 3:30 before closing at 2168.
For the day the SPX/DOW gained 0.85%, and the NDX/NAZ gained 0.80%. Bonds lost 12 ticks, Crude rose 15 cents, Gold dropped $4, and the USD was lower. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Today the Q3 GDP estimate was lowered: 2.4% v 2.8%.
After yesterday’s afternoon negative news on Deutsche bank, the news turned not so negative this morning and the stock/markets reversed. Instead of heading lower the market rallied back into the 2177 pivot range, after being quite oversold at yesterday’s lows. Since the SPX 2120 low this advance has been quite choppy. All rallies have been sold creating a series of overlapping advances up to SPX 2180, and even after that high. This certainly does not look like an impulse wave. Will cover the implications in the weekend update. Best to your weekend!
MEDIUM TERM: corrective activity continues
LONG TERM: uptrend