Tuesday, July 7, 2009

Tuesday 7/7/09 1m Chart

The market declined breaking through the 880s. 888.36 (the low of [a] of W) was broken so wave [c] of W appears to be under way. The count remains the same but a valid alternate is below.

The degree of the sell-off labellings are on speculation of a larger decline yet to be confirmed by the breaking of the possible head and shoulders neckline at 878. Two impulse waves (i and iii) are nearly complete leaving room for at least one more creating 5 waves. This final wave of the larger impulse should take the market deeper into the 870s below 879. If it reaches lower but bounces back before closing, the [c] wave may be complete without a decisive break through the 878 neckline. A slanted neckline can also be drawn and this was broken through today.

ii was just short of a 50% retracement of i. iii appears to be under way and not yet completed. So far iii is longer than i by a hair but this is a zigzag sign. There is a good chance that [b] was not completed but is actually forming an expanding flat. If the market breaks above 886.6 (or much above 885) this is the primary count. The 'b' wave seems a bit long (the main reason why I am doubting the count), but the flat's 'a' wave may be very close to 61.8% of its 'b' wave especially if there is slightly more downside tomorrow. This count is a valid choice.

Some waves drawn today, mainly corrective waves, are not in proportion with one another.

[b] was much shorter than the [b] of W.

[a] was a zigzag with another zigzag being completed. Its waves would be i, ii, and iii. Then X may not be complete or Y is not a zigzag making WXY is a double three.

[b] was not completed. Today was a zigzag down, part of a larger [b] correction like a flat or triangle.

This is not a correction but the new bear market of primary wave 3. Unlikely with W's wave structure.

Some subminuette alternatives on the chart are shown.

Some comments in white discuss alternative corrections.

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