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tuesday update
Jan 07, 2009

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SHORT TERM: market continues to edge higher, DOW +62
Overnight the Asian markets were again mostly higher. Europe also open higher and closed +1.05%. US index futures were higher overnight and the market gapped up a few points at the open to SPX 935. Then it continued to rally to 944 by 10:00, a new high for the uptrend. At 10:00 ISM services were reported at 43.6% v 37.3%, but Factory orders continued to decline -4.6% v -6.0%, and pending Home sales continued to slide -4.0% in November.

The market sold off on the news but made the low for the day by 11:00 at SPX 927. For the next few hours the market stayed within the opening range when at 2:00 the FOMC minutes were released by the FED: http://www.federalreserve.gov/monetarypolicy/fomcminutes20081216.htm. The market rallied on the report, hitting SPX 942 by 3:00, but then dropped back to 930 by 3:30. A generally positive day as the SPX vacillated above and below the 935 pivot. At the close the SPX/DOW were +0.75%, and the NDX/NAZ were +1.25%. Bonds were up 13 ticks, Crude gained 25 cents, Gold added $6.00, and the Euro was lower. Support for the SPX remains at 912 and then 848, with resistance at 935 and then 961. Short term momentum stayed around neutral for most of the day. Tomorrow, the ADP employment report at 8:15, Non-farm payrolls are on friday.
Today the SPX broke through the 935 pivot when it hit 944, and then spent the rest of the day vacillating around that level. Again, the short term negative divergences were ignored, as they have been since this rally got underway on December 29th at SPX 857. With the 935 pivot cleared the next objective is 961. This pivot should provide some significant resistance as noted in the weekend update. Best to your trading!
MEDIUM TERM: uptrend from SPX 741 continues
LONG TERM: bear market rally
CHARTS:  http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987    

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