Market Update - 12/21/2009

Dow Jones Industrial Average: +85.23 or 0.83% at 10414.14

S&P 500 Index: +11.58 or 1.05% at 1114.05

NASDAQ Composite Index: +25.97 or 1.17% at 2237.66

NYSE Internals: 2197 Advance. 852 Decline.

US Dollar: +0.242(0.32%) at 78.420 | Crude Oil: -1.00(1.34%) at 73.42

Gold: -19.30(1.74%) at 1092.0 | VIX: -1.19(5.49%) at 20.49

Markets rally, led by Materials, Tech and Healthcare sectors.

The pattern that has been ongoing for over a week now occured again today. The Nasdaq was the only index to make a new high. The SPX came within 2 points, and the Dow was off by about 55. The Nasdaq is getting stronger once again, and the Dow is getting weaker. Similar pattern to what started this rally back in March, when the Dow was the lagger for quite some time.

But as you can see from this Nasdaq chart, it is running out of room quickly.

I posted about the Dollar in my weekend update, saying that it may have topped short term. While the Dollar was down throughout the night, it started to rally once the market opened. We saw an immediate turn around in commodities, as Crude Oil and Gold began to sell-off on the strong US Dollar, but it didn't impact the SPX or the Dow, another pattern that has been ongoing for a while now. But regardless, the US Dollar did not make a new high today, so I am going to stick with my count. It may break that high by a few cents here and there, but I think a decent pullback will come in the next week or so, then the Dollar will continue its uptrend.



For the SPX, it seems that we completed 5 waves up today. The degree at this point is hard to tell, but I will label them as Minuette for now. These 5 Minuette waves up probably completed Minute 1. I expect a small Minute 2 pullback before it goes higher. We may go back and test 1105-1110 tomorrow morning. The key number still to watch for is 1100. A break of 1100 to the downside could take us back to the 1085-1090 range. Breaking 1120 will be exteremely bullish.

Tomorrow is the big GDP report. I expect the GDP numbers to make the markets quite volatile, specially if the numbers are better than expected. If the numbers are good, it may be up big tomorrow. So watch for those numbers, they come out at 8:30 AM Eastern.