Market Analysis for Feb 3rd, 2004

Sideways Countertrend Move
By Mike Paulenoff,

For the second day in a row we had a weak first half-hour or so, and then a strong subsequent 2-3 hours. Yesterday was a much more potent upside move after the weak first hour. If you recall the E-mini S&P came down yesterday from about 1134 to 1126 , and then all of a sudden rocketed to 1142. Then, of course, in the last 40 minutes of the session they careened down to the 1129-28 area.

So overnight last night we had another sideways affair, and in the first half-hour of trading the index went down from about 1134 to 1129, then pivoted and took off. Whereas yesterday they rallied nearly 16 points, today the E-mini March S&P's rally was roughly from 1129 to 1137, or 8 points. So there's a big difference in magnitude.

For me, that's significant, because yesterday's high at 1142 looks like it ended something. Everything after yesterday's intrady high at 1142.25 -- the move back down in the late session, then the sideways overnight and the down-up movement today -- everything since 1142

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