Tuesday, August 17, 2010

Tuesday 8/17/10 Market Update

The market rallied today as expected in yesterday's update. Looking forward, there are two good options to describe the current price action; an upward zigzag correction has completed with (iii) underway, or wave x of (ii) is underway following zigzag wave w. There is also a chance that a more substantial impulsive rally is underway that will invalidate the count.

At this time the former option seems the most likely given that just over a 50% retracement of (i) has already been reached today.

It appears that one impulse lower (wave (i)) has completed. Given the corrective nature of labeled wave [c] and the current price of the S&P 500, this move down should be the first wave of a larger move lower. In other words, the 1020 area should be tested and eventually broken.

The larger view is still calling for a substantial sell-off well below 1000.

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