Strategy: The market has come far, fast. There are millions of shares that were bought at the “all in test” of the October 10 lows that are looking to ‘get even’. The market has stabbed through this level and it would not be surprising to see an hourly shakeout today but I would not become too bearish on the first sharp shakeout. The market handle its first ‘swoon’ and fainting spell late yesterday when it looked as if another last half hour helter skelter play might play out. It did not. Be that as it may today could shape up as a small corrective day but I think there is a better than average likelihood that Wednesday will be the high of the week.



The S&P has still not traced out two consecutive higher highs so a higher high midday today could be a level with which to lock up some profits rather than press. A second higher high today would leave a -1 + 2 sell set up. If the market has legitimately turned up then the behavior from that set up will be telling. Likewise, the first turn up of the 3 day chart and the next tag of the 20 dma will be levels and patterns to keep on the radar.



The 20 dma is just below 900 S&P while the weekly Swing Chart will turn up on trade above out old friend 882 (a master square). As long as 824 S&P holds (another master square) I would look to buy dips, especially on any pullback that holds that level. A turndown in the daily swing chart on Wednesday morning on trade below whatever today’s low is would set up a potentially bullish Catapult play.

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