Market Update - 2/23/2010

We got the confirmation I was talking about yesterday. I said yesterday that in order for Minor Wave 2 to be over, we needed to be down a convincing amount today, and that's what happened. But I am still not as confident in this count as I would like to be

I have a few counts that I want to go over first.

Count 1: Today was the start of Minor Wave 3. But we ended some type of wave 1.
Count 2: Today was the end of wave (iv) of [c] of 2, which means we will break over 1112 over the next day or so.

Here is a chart on that count.

If we continue down tomorrow, my second count will most likely be out of play. If we get a small bounce tomorrow, we'll need to see where it takes us. 1105 needs to hold on this bounce, if not, we may still be in Minor Wave 2.

Over the weekend, I talked about a potential head and shoulders on the daily SPX chart. So far, it looks in good shape.

It looks like the right shoulder is complete, let's see what happens if we make it to the neckline.

Not a lot of charts today, but at this point in the wave structure, we just need to watch the key pivots. Breaking below today's low of 1092 is bearish, and if we do break 1083-1085 tomorrow, then a next downtrend could be confirmed. 1105 and 1110 need to hold to the upside.

Let's see what tomorrow brings!