US stocks enjoyed strong rally overnight as boosted by solid corporate earnings from Coca-Cola to Twitter. S&P 500 and NASDAQ closed at records of 2933.68 (up 0.88%) and 8120.82 (up 1.32%) respectively. Though, they’re both held below intraday highs. DOW also gained 0.55% to 26656.39.
Technically, the strong momentum suggests that both S&P 500 and NASDAQ will easily take out intraday records at 2490.91 and 8133.30. That could likely pull DOW upward to equivalent level at 26951.81. Yet, we’re still not too convinced that the indices are in long term up trend resumption yet.
Two developments give us some doubts over the underlying momentum of the global markets. Firstly, Asian markets are not following and with major indices, except Singapore Strait Times, turned red after initial gains today. Secondly, Yen is the strongest one for the week so far while USD/JPY is stuck in tight range only, which isn’t the usually development seen in strong risk on market. Thus, there will be a lot of caution in the next move up.
Anyway, for now, near term outlook in SPX will release bullish as long as 2891.90 support holds. Firm break of 2490.91 should at least bring a test on 3000 psychological level.
Similarly, near term outlook in NASDAQ will remain bullish as long as 7950.97 support holds. Firm break of 8133.30 will confirm long term up trend resumption.
