Big picture monthly $UST continues to hold support. The hammer candle that ended February argued that it was ripe for an upturn (into potential... yes, deflation blip) and has been followed by upside driven by the events in Japan. This has built in market distortions that may not be bearish at all and might actually have purged over bullish sentiment more handily than if markets had just rolled over naturally.
This in turn, could extend the global rallies. In this scenario, today's rebound would fail and new lows to SPX 1220 (per the chart posted yesterday) would potentially make a bottom, as Prechter is delayed well out into the future ;-). As noted in the update, this will need to be managed week to week. The Japan disaster has dealt a wild card.
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