Market Update - 2/5/2010

Interesting day today. We were down big throughout most of the morning and early afternoon, but after the Consumer Credit Report at 3 PM, we had a hard reversal back up.

Minuette wave (i) is most likely over. The targets for wave (ii) are a little unclear at this point, but the mid 1070's look good for now.

We may have completed the first leg of Minuette wave (ii).

Today's low was the key pivot of 1044. This number is very key. It has served as resitance in the past, and it is now support. Breaking back down below this level will be bearish. But for now, it was clear how strong of a support level this is. We bounced up over 20 points on the SPX from 1044. This is a HUGE move in such a short amount of time.

As you can see from that chart, 1044 is a very significant level.

For Monday, we may get a quick subminuette wave b down, then go back up for wave c, which would complete wave (ii). The ulimtate bearish count is that today's up move was the end of wave (ii), and Monday, we gap down big and break through key support.

The US Dollar also had a big up move today, but it reversed down as the SPX got stronger.

I also expect a wave (ii) pullback in the US Dollar.

I will have a weekend update later in the weekend, so please check back for that!