Wednesday, July 7, 2010

Wednesday 7/7/10 Market Update

As discussed in yesterday's update, a large retracement of Tuesday's decline would be an indication that a larger corrective wave is underway. This is exactly what occurred today and in a grand fashion. The advance since yesterday's low counts very well as a completing zigzag corrective wave. This wave appears to be (y) of [ii] of 3 in the context of the larger count.

The 1065-1080 area is a good target for the completion of wave [ii] using the targets above.

A closer inspection of the advance reveals why the advance since yesterday's low looks corrective. The pullback in the late morning hours is almost nonexistent which is certainly not typical for a second wave. Wave (x) and (y) look dissimilar, but this is normally a feature of double zigzags.

Look for a 5 waves up following the labeled b of (y) wave for the completion of [ii] (unless a more rare triple zigzag wave [ii] is unfolding).

The larger view above shows a clear change of trend in the short term.

The larger view remains unchanged.

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