Thursday, August 19, 2010

Thursday 8/19/10 Market Update

Since yesterday's peak, an impulsive wave down likely completed today. Choppy waves higher followed today's low. The impulse lower can be the 'c' wave of a flat that began at Tuesday's peak or a 1st wave. Because impulse waves higher are required for the first option, it is most likely that a 1st wave lower has completed with a second wave following that may or may not be complete. The next move below ~1070 should initiate the next down move.

A more complicated and unusual wave (ii) double correction may still be underway as the alternate above suggests, but again the rally higher looks too corrective for this to be the correct view. Wave (ii) would also be quite wide (slow to unfold) which seems a bit odd considering a recently completed ending diagonal has yet to be fully retraced. Additionally, second waves are typically zigzag family patterns, not flats or doubles.

A move below the above channel line should unfold in the days ahead.

There are quite a few unfilled downward gaps just above current prices. If the larger count is correct, these gaps will not be filled for a long time.

Prices should reach well into the 900s if the count above is correct.

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