I have fallen a bit ill but I'd like you post a short note anyways.
The market opened lower today but with some pickup in volume. Obviously the wave count mentioned yesterday did not play out. But with can easily relabel Monday's high as the peak of an impulse that began 11/02/09. This would be the completion of wave (v) of [v].
Now notice the rally into the close yesterday that preceded the gap down today. In my experience, this pattern is a strong indicator that corrective waves are actually moving lower, not bear market waves. We have seen corrective waves like this throughout the wave [2] rally. In addition, the waves since Monday's peak do not look impulsive. So I now believe the rally since 11/2/09 was actually wave A of (Z) of [2] with wave B of (Z) of [2] underway. It is possible wave B has already completed, but I would guess B is still underway even if the market rallies tomorrow (it could be a flat or a triangle).
There is a good technical argument for the completion of wave [2] Monday, but I don't see it confirmed in the waves. It is possible though. I would expect lower prices tomorrow if this is a correct assessment.
Have a nice weekend.
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