Market Analysis for Feb 27th, 2004

Note: This is a new Friday extended feature appearing late session rather than "mid-day" and analyzing the indices & Qs intermediate-term.

As we head into the last 30-40 minutes of trading in the E-minis we've had one heck of a day for no other reason than there have been so many whipsaws.

The market opened higher. Some economic data came out and it didn't really have much of an impact. All of the data basically came in as expected, give or take 10%, so the data itself shouldn't have created any impact on the market.

Nonetheless, the uneven stair-step rally that's been ratcheting higher since Tuesday morning got another lift in mid-day and took the Tuesday-Friday rally to new highs.

In the E-mini S&P, that rally went to 1152, and in the E-mini March Nasdaq that rally went to 1486 and a fraction. The rally in the S&P was a bit more than we expected. We figured 1149 would do it. It overshot by 3 points. Then, all of a sudden, everything turned tail in a huge decline that took the E-mini March S&P down to 1140 from 1152.

At that point, the countertrend rally that we thought was developing all week long after Tuesday's low looked like it had ended at 1152. The first shot over the bow for the next downleg was looking like 1140.

Since that low was hit, though, the March S&P has been grinding higher, almost recovering the entire upmove to 1152. We've gotten back to 1150 and as we speak we're at 1148.

As long as 1152 remains intact as a pivot from earlier today, our work is telling us that that is a significant secondary high in the E-mini S&P. By secondary high, I mean the first series of highs occurred in mid-month of February at 1158.75. We had a downleg into this past Tuesday's low at 1133