Thursday, September 2, 2010

Thursday 9/2/10 Market Update

The action today fits best within the modified short term count above, but the view that wave [i] is underway has not changed since yesterday's update. As time passes, it is becoming more difficult to count an impulse higher since Tuesday.

Tomorrow the expectation is for another small move higher perhaps to 1095 (maybe even 1100), then the beginning of a sell-off that will eventually take prices below 1000. A complete wave [ii] is also possible, but a breakaway gap initiating wave [iii] seems a bit questionable at this early stage of a decline.

The unemployment report is made public tomorrow at 8:30 am EST 1 hour before the market opens. It will be interesting to see how the market will react, especially given the nearly complete wave [ii] count presented here.

1095, the 61.8% retracement level of [i], is quickly approaching and may be reached tomorrow. Resistance in the current area should stop wave [ii] before and 1100 breakout.

The larger view still calls for an eventual break of 1000 before a new recovery high even if wave [3] is not underway.

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