SHORT TERM: gap up opening, DOW +429
Overnight the Asian markets gained 0.8%. Europe opened higher and gained 1.0%. US index futures were higher overnight, and at 8:30 the PPI was reported higher. The market gapped up at the open to SPX 2649, dipped to 2639 by 10am, then rallied to 2663 by 11:30. At 10am wholesale inventories were reported higher. After reaching SPX 2663 the market became choppy, with a bias to the upside, after a drop to 2636 by 12:30. Heading into the last hour of trading the SPX hit 2665, then dipped to close at 2657.
For the day the SPX/DOW gained 1.75%, and the NDX/NAZ gained 2.15%. Bonds lost 4 ticks, Crude rallied $2.35, Gold rose $3, and the USD was lower. Medium term support is now at the 2656 and 2632 pivots, with resistance once again at the 2731 and 2780 pivots. Tomorrow: the CPI at 8:30, then the budget deficit and FOMC minutes at 2pm.
The market volatility continues. After a gap up opening on Monday the market rallied 50-points from Friday’s close, only to lose 40+ of those points in the last two hours of trading. Today the market again gapped up at the open, and again rallied 50-points from the prior close. Then after dropping 27-points the market, this time, recovered to post a higher high in the last hour of trading. Yesterday we posted a tentative Minor waves 1 and 2 at 2672 and 2586 respectively. This would suggest Minor 3 is now underway. But since the SPX 2586 low the market has been choppier than the 2586-2672 rally. Next couple of days should be the tell. Short term support/resistance the same as medium term above. Short term momentum ended the day above neutral. Best to your trading!
MEDIUM TERM: downtrend may have bottomed
LONG TERM: uptrend