Tuesday, February 1, 2011

Tuesday 2/1/11 Market Update

There was a huge rally today, over 20 S&P 500 points. It should be crystal clear that there is an impulse forming since Friday's low.

Several concerns about the formation of the Friday decline were stated in yesterday's update. At the same time, there was good reason to believe the last count was correct.

Clearly the count was not correct, so one of the alternates suggested 2 days ago is now being used. Wave [iv] has been moved forward as illustrated above. It was difficult to come up with this count and it will be extremely difficult to move [iv] forward again. The choppy action over the last month is indicative of a series of 4th waves and this works well with the count.

There should be at least a correction of the rally since November coming soon. If the count on the smaller scales is correct, look for a top this week, perhaps tomorrow.

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