S&P 500 Analysis for 2-2-10

The SPY gapped back up through prior support at 108.00 and followed through to the upside in a choppy session on Monday.  The market is still showing a pattern of intermediate term lower highs and lower lows as it is trapped below the declining 5 day moving average.  If the market can hold above ~108.30 on Tuesday and recapture the 5 day moving average, this bounce could continue higher towards the highs of the last three days at 109.80, 110.25 and 110.45.  The market remains damaged and rally attempts from these levels should be viewed with suspicion.