SHORT TERM: gap up and go Monday, DOW +371
On Sunday afternoon the FBI announced they had dropped the entire Clinton-probe, after reviewing the new emails. SPX futures rallied when they started trading last night. Asian markets gained 1.0%. Europe opened higher and gained 1.8%. US index futures soared overnight, and the SPX gapped up to 2112 at the open. The market had closed at SPX 2085 on Friday. By noon the SPX had reached 2129, with small 2-3 point pullbacks along the way. After that the market went sideways within a 2 point range until about 2:30. At 3pm consumer credit was reported lower: $19.3B v $25.9B. Then after a dip to SPX 2124 by 3:30, the market rallied to close at 2132 the high of the day.
For the day the SPX/DOW gained 2.15%, and the NDX/NAZ gained 2.40%. Bonds lost 13 ticks, Crude gained 90 cents, Gold dropped $23, and the USD was higher. Medium term support rises to the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots. Tomorrow is Election day.
A week and a half ago the FBI announced they had reopened the Clinton-probe when the SPX was at 2141. After nearly 6 days of trading the market had dropped to SPX 2084 on Friday. Futures rallied overnight after the FBI announced they had closed the probe again. At Monday’s high, SPX 2132, the market had retraced all of last week’s SPX 2126-2085 decline. Short covering, hedges being removed, and some buying too? The two previous impulse uptrends started off in a similar fashion: a strong rally, with strong breadth, and very small pullbacks along the way. With Election day tomorrow, and election results likely that night or the next morning, short covering could turn into outright buying to keep this rally going. Thus far the market has gapped over SPX 2100, rallied through the 2116 pivot, then ran into resistance at the 2131 pivot. Certainly an interesting way to start the week. Short term support is at the 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum was quite overbought at today’s high, then backed off a bit. Trade what’s in front of you!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: uptrend