First test at major resistance ...

Yesterday
Well we had hit both of my price targets I had been referring to over the past week. First test at the 839-842 range with a top of 842.xx. I would have expected this one to hold for at least another test or two but the second range of 846-848 may have been to close there and we marked the top of the day at 845.61.

So for now lets combine them both into the 839-848 range and state why this is so important. First off, from an Elliot Wave Theory perspective this range represents a major decision point for the market. It will either be the top to start our final leg down towards my 480 targets or could mean that this is a 3 wave corrective move after having completed a 5 wave major downturn. While this does not change our long term bearish trend it could mean that we have another leg to go on the upside bringing us to the ranges I had mentioned in the past. I will reiterate those this weekend in a more detailed review to outline some of the longer term scenarios.

Now as you remember I had stated that the Feds have made a move for the first time that has gone against everything else we have experienced in the past 2 years. Outside intervention has only ever stepped in at major low points and was the cause for a major rally to follow. Now this time it was a bit different, the market has gone from 666 towards the 780 range without that type of intervention. Then at this range the feds stepped in an nudged the market while it was about to form a top. When taking history into account, this could very well mean a continuation or start of a new rally which it seems we are setting up for. Remember, 780 is where the feds stepped in and during our retracements we have NOT been able to drop below this range - that is quite a bullish sign. I am not saying go out and go long but we need to ensure we know what our trends are - short, mid and long term. If this Fed interference at the 780 will stick (of course with all other major changes during this month), we have a potential to see 900 (I would expect 920 or 945).

Of course fundamentals have not changed and one may ask why we can rally so much when things are so bad? Same pinciple as trends, long term our fundamentals are quite bad, on the short and mid term side they are actually not that bad. Look at RIMM, look at NASDAQ. Very positive results. The jobs number today will tell another story but I honestly feel it will be interpreted to some degree as a bullish result. Some of you remember my definition of the truth - in short - its what you can make others believe.

Today
Again today is quite difficult because its based on interpretation of facts, not the fact alone. So wait for the market to tell us what to do. Keep our range in mind here and look at volume. I would expect today to be quite volitaile, very unpredictable and full of surprises (hmmm, I think every day this month has kind of been like that).

Go long? Go short? - Even if I had an strategy I would not recommend any at this point because the risks are just too high.