SHORT TERM: gap up opening, DOW +216
Overnight the first round of the France elections completed. Asian markets gained 1.0%. European markets opened higher and gained 3.2%. US index futures were higher overnight, and the market gapped up to SPX 2374 at the open. The market had closed at SPX 2349 on Friday. By 10am the SPX hit 2375, then pulled back to 2369 by 11:30. After that the market worked its way higher, hitting SPX 2377 just past 3pm, then dipping to close at 2374.
For the day the SPX/DOW gained 1.05%, and the NDX/NAZ gained 1.20%. Bonds lost 8 ticks, Crude slid 40 cents, Gold dropped $9, and the USD was lower. Medium term support remains at the 2336 and 2321 pivots, with resistance at the 2385 and 2411 pivots. Tomorrow: Case-Shiller and the FHFA housing index at 9am, then new home sales and consumer confidence at 10am.
The market gapped up at the open today, immediately altering the short-term downtrend symmetry noted in the weekend update. With Europe having a big up day, in anticipation of Macron victory on May 7th, markets around the world rallied. With the SPX/DOW confirming downtrends, and the NDX/NAZ not, the current short term activity could move either way. The NDX/NAZ uptrend could continue to extend, forcing the SPX/DOW into an uptrend. Or Europe could reverse taking other indices down with it. Key levels to watch in the SPX are at 2378 and the 2385 pivot range on the upside, and 2345 on the downside. Whichever gives way first the market will likely continue in that direction. Short term support is at SPX 2345 and the 2336 pivot, with resistance at the 2385 and SPX 2401. Short term momentum ended the day with a slight negative divergence. Trade what’s in front of you!
MEDIUM TERM: downtrend
LONG TERM: uptrend