Monday, November 15, 2010

Monday 11/15/10 Market Update

There was a rally today followed by a slip lower in stocks for a lower S&P 500 close. The action today works well with the alternate count seen in yesterday's update calling for a "3rd of a 3rd" wave lower. Actually wave [3] of iii of (iii) should be underway for a weak day tomorrow.

So far the action since the peak looks quite choppy. Even if a zigzag correction is unfolding from the highs, look for one last low tomorrow to complete a double zigzag. This view works well with the modestly oversold technical picture. A sharp move lower will extend the decline for several more days however.

The view expressed identifies the rally since 8/31 as a zigzag. If this is not correct, there have likely been two large impulses higher within a larger impulse.

With a complete count in place, a decline lasting for at least the majority of a year should be underway.

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