SHORT TERM: gap up opening, DOW +46
Yesterday Italy voted against centrist PM Renzi’s referendum to streamline the government. Markets, and futures trading, worldwide initially reacted negatively. Then rebounded during the night. Asian markets lost 0.2%. Europe opened lower but gained 0.9%. US index futures were higher heading into the open, and the SPX gapped up to 2200 at the open. The SPX had closed at 2192 on Friday. By 10am the SPX had reached 2209, and then started to pullback. Also at 10am ISM services were reported higher: 57.2 v 54.8. The pullback continued until about 2:30 when the SPX hit 2201. Then a bounce into the close ended the day at SPX 2205.
For the day the SPX/DOW gained 0.40%, and the NDX/NAZ gained 0.90%. Bonds lost 2 ticks, Crude slid 65 cents, Gold dropped $6, and the USD was lower. Medium term support remains at the 2177 and 2131 pivots, with resistance at the 2212 and 2270 pivots. Tomorrow: the trade deficit at 8:30, then factory orders at 10am.
The market gapped up at the open today, rallied to within 5 points of the all time high, then pulled back for the rest of the day. With today’s rally above SPX 2203 we are posting a tentative Minute ii labeling at last week’s SPX 2187 low. This suggests Minute wave iii might already be underway. A rally to new highs would help to confirm this view. Short term support remains at the 2177 and 2131 pivots, with resistance at SPX 2214 and the 2270 pivot. Short term momentum hit overbought during the opening rally, then backed off during the pullback. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend