Sunday, February 21, 2010

Weekend Update

Well, with options expiration behind us we should see some range expansion come back into the market, which should equate to a resumption of the downtrend. However, what I'm not sure about is if the top was put in on Friday or will come early in the week: Monday/Tuesday.

It appears that we have a five wave completed pattern for our C wave, but it is too early to tell. If the top was in on Friday we should see an acceleration gap to the downside Monday morning. If not, then the most likely scenario is strength in the morning to retest or break the highs. Above Friday's high there is not much resistance until we get to 1127, so watch any potential follow through to the upside to squeeze some more shorts. We still need a close below 1080 to confirm the resumption of the downtrend.

Key resistance: 1110 and then 1128
Key support: 1100, 1092, and then 1082.
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