SHORT TERM: another gap up opening, DOW +128

Overnight the Asian markets were mixed. Europe opened higher and closed +0.95%. US index futures were slightly higher overnight. At 8:30 the monthly Payrolls report displayed an improvement: -54K v -131K, but the Unemployment rate rose to 9.6% v 9.5%. Index futures rose on the news and the market gapped up at the open to SPX 1098, above the 1090 pivot. The rally continued as the SPX hit 1105 within the first few minutes of trading. The SPX had closed at 1090 yesterday. After this initial surge the market hit an extremely overbought level short term and started to pullback. At 10:00 ISM services were reported lower: 51.5 v 54.3. Around 11:00 the market traded back into the 1090 pivot range and found support at 1095. Then it started to rally again. At 2:30 the SPX reached 1104, pulled back to 1100 by 3:00, and then rose to close at SPX 1105.

 

For the day the SPX/DOW were +1.30%, and the NDX/NAZ were +1.60%. Bonds lost 18 ticks, Crude dropped 70 cents, Gold slipped $5.00 and the USD was lower. Support for the SPX notches up to 1090 and then 1058, with resistance at 1107 and then 1136. Short term momentum was extremely overbought at today's opening, and has remained overbought for the third day in a row. Last night the FED reported both the M1 multiplier and Monetary base continue to move sideways. Today, the WLEI dipped to 39.9% v 40.1%, economic contraction mode continues. Monday is a holiday in the US, Labor Day.

 

For the past couple of weeks this uptrend has acted like it was tied to a bungee chord. In early August the market ran into some trouble at SPX 1130. It pulled back some to 1069 and then started to rally. Again it ran into trouble, but this time at SPX 1100. The market then sold off sharply, reaching the downside limit of the uptrend at the 1041 pivot, and then bounced back to life this week. Longer term, this market remains in the SPX 1040-1130 trading range, spare about one week, since mid-May. Enjoy the three day weekend!

  

MEDIUM TERM: uptrend

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987  

SHORT TERM: rally challenges 1090 pivot, DOW +51

Overnight the Asian markets were all higher. Europe opened higher but closed mixed. US index futures were relatively flat overnight, and at 8:30 weekly Jobless claims were reported about flat: 472K v 475K. Also, Productivity declined: -1.8% v -0.9%, while unit Labor costs rose: +1.1% v +0.2%. At 9:00 FED chairman Bernanke testified before the senate: http://www.federalreserve.gov/newsevents/testimony/bernanke20100902a.htm. The market opened flat, around SPX 1080, but rallied to 1087 and the 1090 pivot range by 10:00. At this time Factory orders were reported positive: +0.1% v -1.2%, and Pending home sales rose: +5.2% v -2.6%. The market then pulled back to SPX 1082 by 10:30. For the next several hours the SPX stayed in a narrow trading range while drifting higher. Then, in the last couple of hours the SPX took out the 1087 high and move higher to close at exactly 1090. 

 

For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +1.10%. Bonds lost 9 ticks, Crude gained $1.10, Gold added $5.00, and the USD declined. Support for the SPX remains at 1058 and then 1041, with resistance at 1090 and then 1107. Short term momentum remained overbought throughout the day. Something we have not seen in quite a while. Tomorrow, the monthly Payrolls report and Unemployment rate at 8:30, then ISM services at 10:00.

 

The rally off of tueday's SPX 1041 low continued today. The SPX is now right at the 1090 swing pivot we have been tracking for what seems like months. Remember, this market has traded between the 1041 pivot and the 1136 pivot, spare one week, since mid-May. Short term OEW charts remain positive. The key areas to watch are this pivot and the SPX 1100 level on the upside, then, the 1058 and 1041 pivots on the downside. The hourly RSI has now stayed overbought for two days, and the daily RSI is approaching overbought. Tomorrow, the often market volatile Payrolls report. Should be an interesting day before the three-day, end of summer, holiday weekend. Best to your trading!   

 

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987  

SHORT TERM: OEW 1058 pivot remains resistance, DOW +5

Overnight all the Asian markets were lower. Europe opened lower but closed +0.35%. US index futures were lower overnight and at 9:00 Case-Shiller housing prices were reported positive: +4.2 % v +4.6%. The market opened lower at SPX 1046 and immediately retested support at 1041 in the first few minutes. At 9:45 the Chicago PMI was reported lower: 56.7 v 62.3. The market started to rally. At 10:00 Consumer confidence was reported higher: 53.5 v 50.4. The market hit SPX 1054 around this time and started to pullback. By 11:00 the SPX found short term support at 1049 and then tried to rally again. Around noon the SPX hit its high for the day at 1055 and started to pullback again. At 2:00 the FED released the FOMC minutes: http://www.federalreserve.gov/monetarypolicy/fomcminutes20100810.htm. The market bounced a couple of points and then headed lower. At 3:00 the SPX hit 1044 and then rallied some into the close to end the day at SPX 1049.

 

For the day the SPX/DOW were +0.05%, and the NDX/NAZ were -0.25%. Bonds gained 14 ticks, Crude lost $2.90, Gold rallied $10.00, and the USD was lower. Support for the SPX remains at 1041 and then 1032, with resistance at 1058 and then 1090. Short term momentum was extremely oversold this morning, rallied to neutral, and then stayed within that range into the close. Tomorrow, the ADP employment index at 8:15, Construction spending and ISM manufacturing at 10:00, then monthly Auto sales in the afternoon. We also have a Senate testimony and then a speech by FED members tomorrow. FED general council Alvarez gives Senate testimony at 9:00, then FED governor Duke gives a speech at 10:45.

 

The market retested the OEW 1041 pivot early this morning and then tried to rally. This was the third test of this pivot in the past five trading days. The market then tried to rally in the morning, but the rise did nothing for the short term OEW charts - they remain negative. With market weakness since the second week of August it will not take much more downside to confirm an OEW downtrend. The DOW count is looking more and more probable every day. Important trend support remains at the OEW 1041 pivot. A break of this pivot and the downtrend will likely be confirmed. Resistance remains, as it has for six trading days, at the OEW 1058 pivot. Best to your trading!   

 

MEDIUM TERM: uptrend in serious jeopardy

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987 

SHORT TERM: no upside follow through, DOW -141

Overnight the Asian markets were all higher. Europe opened higher but closed -0.65%. US index futures were initially higher overnight and then turned lower. At 8:30 Personal income was reported higher: +0.2% v 0.0%, Personal spending was higher: +0.4% v 0.0%, and PCE prices nudged higher +0.1% v 0.0%. The market opened lower at SPX 1061, then traded up to 1064 by 10:00. That was the high for the day. The SPX had closed at 1065 on friday. The market then started to pullback in a quiet controlled fashion. The pullback continued throughout with only 3 or 4 point bounces, and the SPX closed near the lows at 1049. 

 

For the day the SPX/DOW were -1.45%, and the NDX/NAZ were -1.65%. Bonds gained 32 ticks, Crude dropped 90 cents, Gold added $1.00, and the USD was higher. Support for the SPX drops to 1041 and then 1032, with resistance at 1058 and then 1090. Short term momentum declined from friday's overbought, and hit oversold at the close. Tomorrow, Case-Shiller home prices at 9:00, the Chicago PMI and Consumer sentiment around 10:00, then the FOMC minutes at 2:00.

 

The market opened to the downside today, tried to rally, then broke through the neutral hourly RSI level. Was expecting this RSI level to hold if the market was going to continue friday's double bottom SPX 1040 rally. Later in the day the SPX broke through the 1058 pivot range as well. Short term OEW charts have turned negative again and it appears the path of least resistance for this market is lower. The DOW alternate ABC Primary wave II count continues to rise in probability. Best to your trading!  

 

MEDIUM TERM: uptrend in jeopardy

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

SHORT TERM: overnight buying - market gaps up, DOW +255

Overnight the Asian markets were mostly higher. Europe opened higher and closed +2.70%. US index futures were higher overnight and at 8:15 the ADP employment index reported a job loss: -10K v +42K. At 9:00 FED general counsel Alvarez testified before Congress: http://www.federalreserve.gov/newsevents/testimony/alvarez20100901a.htm. The market gapped up at the open to SPX 1057 and continued to rally. The SPX had closed at 1049 yesterday. At 10:00 Construction spending was reported lower: -1.0% v +0.1%, but ISM manufacturing was reported higher: 56.3 v 55.5. The market, having cleared the OEW 1058 pivot, continued to move higher. Around 11:00 FED governor Duke's speech was released: http://www.federalreserve.gov/newsevents/speech/duke20100901a.htm. Nearing noon the SPX hit 1080 its highest level since a week ago monday. Around this time monthly Auto sales were reported lower: F -10.7% and GM -25%. The market then went sideways, trading between SPX 1076 and 1080, until about 3:30. Then it nudged out a new highon the day at SPX 1081 and closed at 1080.

 

For the day the SPX/DOW were +2.75%, and the NDX/NAZ were +3.00%. Bonds lost 23 ticks, Crude rallied $2.10, Gold slipped $3.00, and the USD was lower. Support for the SPX jumps to 1058 and then 1041, with resistance at 1090 and then 1107. Short term momentum rose from just slightly oversold to nearly extremely overbought during the rally. Tomorrow, weekly Jobless claims at 8:30, along with Productivity and Unit labor costs. At 9:00 Senate testimony from FED chairman Bernanke. Then at 10:00 Factory orders and Pending homes sales. Non-farm payrolls is on friday.

 

Overnight buying did not fade like it did sunday night and the market gapped up at the open. The gap up cleared the six day resistance at the OEW 1058 pivot in the opening munutes and the market moved higher. Naturally, the short term OEW charts turned positive once that pivot was cleared. Thus far, support has held at the OEW 1041 pivot after three tests over the past week. Looking ahead. In order for the uptrend to resume the 1090 pivot has to be cleared next. As noted yesterday, should the 1041 pivot fail a downtrend will very likely be confirmed. Short term momentum is displaying the typical overbought level that has recently led to pullbacks. Best to your trading!   

 

MEDUM TERM: uptrend in jeopardy

LONG TERM: bull market

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987