TRADING 04 FUTURES

[TREND1]

friday update by tony caldaro


SHORT TERM: market gaps up and keeps going, DOW +278

Overnight the EU apparently concluded their meeting with a plan to aide their distressed soverign debt issues without forcing austerity programs on those that meet their fiscal budgets. The EURO rallied 2% on the news and all other markets responded. Asian markets were +2.1%. European markets opened higher and closed +3.6%. US index futures were much higher overnight as well. At 8:30 Personal income was reported: +0.2% vs +0.2%, while Personal spending declined: 0.0% vs +0.3%. PCE prices were reported +0.1% vs +0.1%. The market gapped up at the open to SPX 1342 and continued to rally. The SPX had closed at 1329 yesterday. Around 10:00 the Chicago PMI was reported higher: 52.9 vs 52.7, and Consumer sentiment lower: 73.2 vs 74.1. The market continued to rally until 10:30 when it hit SPX 1356. Then after a small pullback to SPX 1353 by 11:00 the rally resumed. Heading into the close the SPX hit 1362 and closed there.

For the day the SPX/DOW were +2.35%, and the NDX/NAZ were +3.05%. Bonds lost 16 ticks, Crude soared $7.15, Gold rallied $41, and the USD dropped.

Support for the SPX remains at the 1313 and 1303 pivots, with resistance at the 1363 and 1372 pivots. Short term momentum hit extremely overbought.


Last night the FED reported a decrease in the Monetary base, and today the WLEI was reported lower as well.

The market gapped up at the open today and never looked back. Quite impressive, and kudos to those that were expecting it. The rally, which may have been started by the strength in the EURO, flowed into most asset classes one would expect to see move in a "risk on" scenario. There may be some more important European developments, in the works, than what was announced last night.

The market started the day by gapping up to the SPX 1342/47 resistance zone, and then quickly went right through it. By 10:30 the SPX had already entered the OEW 1363 pivot range: 1356-1370. After that the market struggled a bit to make much more upside progress until near the close. In light of these recent market developments, and the many conflicting signals from various asset classes, we plan to take a look at the big picture for most asset classes in this weekend's report. And, of course, update the status of the US bull market. Best to your weekend!

MEDIUM TERM: neutral to positive

LONG TERM: bull market

CHARTS: http://stockcharts.com/public/1269446/tenpp