SHORT TERM: gap up opening then pullback, DOW +39
Overnight the Asian markets gained 0.5%. Europe opened higher and gained 1.2%. US index futures were higher overnight. At 8:30 the PPI was reported higher: 0.3% v 0.0%, and retail sales were reported higher: 0.6% v -0.3%. The market gapped up to SPX 2146 at the open and continued to work its way higher. At 10am business inventories were reported higher: 0.2% v 0.0%, and consumer sentiment was reported lower: 87.9 v 91.2. Around 10:30 the SPX hit 2149, then started to pullback. The pullback continued until 12:30 when the SPX completely closed the opening gap at 2133. Then after a rally to SPX 2142 heading into FED chair Yellen’s speech at 1:30, the market pulled back after the speech: http://www.federalreserve.gov/newsevents/speech/yellen20161014a.htm. In the last hour of trading the SPX hit 2133 to close unchanged on the day.
For the day the SPX/DOW gained 0.10%, and the NDX/NAZ gained 0.05%. Bonds lost 11 ticks , Crude slipped 10 cents, Gold slid $7, and the USD was higher. Medium term support remains at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Today the Q3 GDP estimate was lower to 1.9% v 2.1%.
The market gapped up at the open today, rallied to SPX 2149, then pulled back for the rest of the day. Today’s early rally extended the advance from yesterday’s SPX 2115 to a Fibonacci 34 points at the high. A pullback to SPX 2128 would also be a Fibonacci number at 21 points. Thus far the pullback is 16 points, which is about half of the initial rally. However, losing the OEW 2131 pivot range (2124-2138) might require a retest of Thursday’s low. Will cover the possibilities in the weekend update. Best to yours !
MEDIUM TERM: downtrend may have bottomed
LONG TERM: uptrend