FOR WEDNESDAY: (2/7) Still on high-volatility alert for a few more weeks but the lowest and most extreme numbers should be in for a while and may not even come out into the March low. If the budget deal looks promising, they may quickly take the market up to 2802. Fun trading now if you have nerves of steel.
MARCH E-MINI S & P 500
S & P ANALYSIS FOR WEDNESDAY: (2/7) We’re assuming that a large 3-wave bounce of 78% will work up to 2802.50 but it may not happen in a straight line. More than likely, a drop to at least 2629-31 will happen before the next push up, and certainly 2594 will hold. The chances of the market making new lows this week are fairly small. If 2800 comes in quickly, then a C-wave pullback could be a reaction to no budget deal. We still think cycles into Friday are messy. I suspect many people won’t have a clear idea of this congestion triangle pattern and will just see craziness. Tuesday was the best day for a bounce, and it happened. Wednesday is not bad but by late Thursday and Friday, it looks uglier.
CYCLE SYNTHESIS: Recovering Wednesday; topping Thursday; lower into Friday.
