Wednesday, August 18, 2010

Wednesday 8/18/10 Market Update

The best count at this time appears to be an upward double zigzag wave (ii) unfolding. A few alternates are listed above.

An upward impulse wave since Monday is possible, but its 4th wave does not alternate with its 2nd and it quite deep for a 4th wave. The 5th wave (today's rally) is also a questionable impulse wave.

Because today's rally does not look impulsive, and the fact that the E-mini sold off just after the close, it appears that a flat wave x of (ii) is underway and will complete tomorrow morning. The trend lines in the first chart will be broken if the E-mini remains at these levels. A wave [B] of y correction completing tomorrow morning is also possible, but the market should not gap down to these levels if this is actually unfolding.

A bounce to the 61.8% retracement level of (i) is the next target.

There should be strong selling coming into the market after the current bounce is complete.

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