Today's Market, Feb. 12th

From a technical viewpoint:

Friday’s action unfolded in an outside reversal bar suggesting if the market close lower today a two to three day decline will unfold. The target for the downward pattern will is the 1427.65/1419.20 range. The extreme allowed is the 1416.40 level.

A penetration of this level will signal a minor top. The pattern that I have been tracking for the past several weeks suggested that I believed we were in the final phase of this sequence. The market reached within two points of the target but it appears that it failed to unfold in a structure that would confirm the completion of the sequence.

The chart ( see attached file below ) suggests that the market is still in a corrective phase. The pattern now looks to be a double three pattern or an (a,b,c,x,a,b,c) pattern within a 4 wave. This suggest that there will one more minor decline to followed by a rally to new highs in the pattern before an intermediate top will be signaled. The next few days will be critical in determining if Friday action was a beginning of a more sustained downward move or just some more of the same pattern that has been unfolding over the past several months.

 

As mentioned in yesterday's comment, the sharp rally has signalled the bottom of the "double-three" correctional pattern that has been in place since late November.
(A-B-C-X-A-B-C for you Elliott Wave fans ).


The confirmation of yesterday's low will be a close above the 1447.95 level today. Should this occur, it would suggest that the market will enter 5 to 8 day rally. The target for this 5 to 8 day patter is the 1461.20/1464.35 levels. The intermediate pattern suggests the market should reach a minimum of 1478/1491 in the next 4 to 6 weeks.

In otherwords, Wave 5 has just started.
See chart below.

 

Very important WEEKLY close today.

Any sell-off should find support between 1451.75 - 1449.35 on the SPX.

A close today above 1455.54 will confirm last week's upward reversal pattern that suggests 2 to 3 more weeks of higher prices.

Upward objectives still target 1470.50 / 1472.85