The SP500 closed right at the low of the January range yesterday as large speculators and institutions probably stepped to defend what's left of their gains for 2011. A sharp bounce from here would not be unexpected, but the now declining 50dema will be resistance. We've seen this play before. In fact it is exactly what happened last year as the flash crash initially took the SP500 down to its January 2010 low. A rally followed and then another decline which took it down below the January low an approximately equal amount to the rise above the January high. Such a move this time would bring the market right back to support at the April and November 2010 highs.
If this is minor wave 4 down, then the market needs to hold up in this area without sustaining below the January low, otherwise we would then be left with four possibilities: 1) a minute wave 2 correction of the rally from the November 2010 low, 2) an intermediate wave 2 correction of the rally from the July 2010 low, 3) wave [X] correcting the entire rally from the 2009 low is underway, or 4) primary wave 3 down is indeed in its beginning stages. For the time being I would lean strongly toward the first two possibilities if minor wave 4 is eliminated. It would take some time to be sure of either of the last two.
In any case, I think that somewhere between yesterday's low and the above target we will see a tradable low.