ACH on Feb06: Up from 1330?

The market has dropped 12 points near the ES 1330 daily support after strength into the end of last week and a good NFP report. Will this drop get longer, say 20 points, or will the market start rising back to 1340?


Hypotheses:


H1 - The market continues its drop, clearly breaking below 1330;
H2 - The 1330 ES daily support holds and the market starts rising again, reaching 1340.



Evidence: 


E1 - Short term TRIN stayed more than 1 day below 1.0 recently, before corrections on the daily chart (see chart below);
E2 - The first pull-back into daily support will be bought by those that liked the strong NFP number;
E3 - The market action may, by and large, resemble what happened after the Jan03, 2011 or Mar23, 2009 moves;
E4 - Uncertainty about the situation in Greece resurfaced;
E5 - Strong up moves are usually followed by smaller rallies during the next days.





Matrix:

	E1	E2	E3	E4	E5	Total negations
H1	-0.5	-0.5	-0.5	+	-1	-2.5
H2	+	+	+	-0.5	+	-0.5

Conclusion:

H2 is the winner. The market has good chances of reaching 1340 before decisively falling below 1330, although a dip to 1327 cannot be ruled out. Thus, we should see strength today, a close near the 1330 level greatly increasing the odds of a bigger correction.

Chart: