Market Update - 3/2/2010

The SPX once again broke through some key resistance today. We made our high at 1123 today. There was some prior resistance around 1121. We backed off into the close, and we closed below 1120. The move down from our highs at this point doesn't seem impulsive. However, if we get some continuation tomorrow, we could start our next down wave.

The wave counts basically look the same, but I have made some slight changes to it. Instead of Minor wave 2 being a simple ABC zigzag, I feel more comfortable counting it as a complex W-X-Y-X-Z, similar to what we had for Primary wave 2.

Overall, nothing has changed. But Minor Wave 2 looks a little extended now, and it seems sluggish. But we have to remember, this is the first bounce of the new downtrend, and it is supposed to be like a "mini" P2.

If today was the end of this bounce, we need to break below some key support tomorrow. 1115 and 1110 for a start. Breaking 1100 will probably give it away.

The daily cande stick pattern today could be a potential Shooting Star. We did not close negative today, but the cande pattern is still valid. This is a bearish reversal candle.

Of course, we need confirmation tomorrow.

For the past few days, I've been saying to keep an eye on the 81.35 level on the Dollar.

We hit 81.34 today and reversed a good amount.

If we break out of the downward channel, I expect another upmove coming to restest and potentially break that level.

The daily charts seem to be consolodating sideways for another move higher.