SHORT TERM: rally resumes, DOW +54
Overnight the Asian markets lost 0.8%. Europe opened higher and gained 0.5%. US index futures were higher overnight. At 8:30 three of four economic reports were positive. Retail sales: 0.8% v 0.6%, export prices: 0.2% v 0.4%, import prices: -0.1% v 0.0%, NY FED: 1.5 v -6.8. The market opened 5 points above yesterday’s SPX 2164 close and moved higher. At 10am business inventories were reported higher: 0.1% v 0.2%. Around 11:30 the SPX hit 2173. Then after a small pullback to SPX 2168, it started to move higher again. In the last hour of trading the SPX hit 2181, then closed at 2180.
For the day the SPX/DOW gained 0.50%, and the NDX/NAZ gained 1.20%. Bonds lost 7 ticks, Crude rallied $2.55, Gold rose $10, and the USD was higher. Medium term support rises to the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Tomorrow: the PPI at 8:30, industrial production at 9:15, then the NAHB at 10am.
The market opened higher today, then in the afternoon broke out of its recent trading range (2151-2178), when it hit SPX 2181. Before the open we discussed, in the OEW forum, the possibility of the recent action being a 4th wave triangle, as noted by some, and the uptrend has only done four small waves up thus far, instead of five: 2147-2125-2182-2151 … Today’s action adds to that possibility, as we do not believe Minute wave ii has completed/occurred yet. The early action today appeared to be profit taking in the industrial/financials, and buying in the growth sector. Should the growth sector continue rising this uptrend could start moving quite fast again. Short term support is at the 2177 pivot and SPX 2151, with resistance at SPX 2194 and the 2212 pivot. Short term momentum ended the day quite overbought. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend