FOR TUESDAY: (2/6) Panic cycles can alter everything so we have to trade off of pattern. We can’t jump on the media’s panic energy or discussion of record DOW point falls, and of course we have to look at the percentage fall–and today’s fall was nothing like Oct. 1987. The Dow is only 30 stocks and we have stopped covering it for that reason. Still, we’re open for something deeper into Friday or maybe a bit longer but Tuesday may be the best day of the week for a bounce. Foreign overnight panic momentum can always feed this market so their markets are more likely to lay big eggs overnight.
S & P ANALYSIS FOR TUESDAY: (2/6) Computer models at the close point to support at 2584 with a bounce target of 2651 and 2688. Daily and weekly chart key targets now come in at 2520 and 2500. We should note that monthly chart parabolic support is at 2569, and it will take a monthly chart close below there for us to re-evaluate. Lower weekly chart support is all the way to 2290 if 2500 comes out. Timing suggests pressure until at least Feb. 9 but these big moves are often followed by huge congestive triangles, and the chance of a 78% bounce happening at some point. We’re more open to a bounce on Tuesday than any other day of the week and so hard to chase this market. Bounces on Tuesday suggest 2652 and 2689.
CYCLE SYNTHESIS: Lower into Feb. 9.
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