SHORT TERM: gap up opening sold, DOW +27
Overnight the Asian markets gained 0.7%. Europe opened higher and gained 0.7% as well. US index futures were higher overnight, and at 8:15 the ADP was reported higher: 246K v 153K. The market gapped up at the open to SPX 2287, ticked up to 2289, and then began to pullback. At 10am ISM was reported higher: 56.0 v 54.7, and construction spending was reported lower: -0.2% v 0.9%. The market continued to pullback until just before noon, when the SPX hit 2272. As the market tried for another afternoon rally the FED: https://www.federalreserve.gov/newsevents/press/monetary/20170201a.htm. At 2:30 the SPX hit 2282, pulled back to 2275 by 3pm, then bounced to close at 2280.
For the day the SPX/DOW gained 0.10%, and the NDX/NAZ gained 0.60%. Bonds lost 6 ticks, Crude rose 75 cents, Gold slipped $4, and the USD was higher. Medium term support remains at the 2270 and 2212 pivots, with resistance at the 2286 and 2321 pivots. Tomorrow: weekly jobless claims at 8:30.
The market gapped up at the open today. But unlike last week’s gap up opening to new highs, this one failed to last more than 10 minutes before it was sold off and the gap was closed. Today’s activity offers another opportunity for choppy corrective ongoing activity, and a potential correction. As a result we are raising the downtrend/uptrend threshold to yesterday’s SPX 2267 low, from 2257. Should the market break SPX 2267 we are probably in a downtrend, along with the R2K. Should it hold and start making higher highs, the uptrend continues. Short term support is at the 2270 pivot and SPX 2257, with resistance at the 2286 pivot and SPX 2301. Short term momentum hit overbought after yesterday’s positive divergence, then declined to neutral. Best to your trading!
MEDIUM TERM: uptrend
LONG TERM: uptrend