Monday, July 12, 2010

Monday 7/12/10 Market Update

The view expressed in Friday's update remains largely the same; corrective zigzag wave (y) of [ii] is completing within a larger impulsive down wave, minor wave 3. In the very short term, wave b of (y) may have completed today as a triangle. The target for a complete wave [ii] is 1085-1093, an area that has been discussed here for days. If there is a gap higher tomorrow, it should be the "3rd of a 3rd" wave of c.

A closer view can be seen in the 1 minute chart above. An ending diagonal or triple zigzag are also options, but the primary count presented seems to be the most likely based solely on wave structure.

The momentum and breadth of the advance is diminishing. In addition, total volume has been extremely light during the past two days (not shown).

The earnings reports presented this week may be the spark to initiate a down move after wave [ii] completes. Alcoa's (AA) earnings were announced shortly after the close of the market. S&P futures are currently 4 points above today's peak.

The larger view remains unchanged.

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