Tuesday, July 26, 2011

Tuesday 7/26/11 Market Update

The market continued lower today through yesterday's low. As mentioned in yesterday's update, this would essentially result in a change to the count. The best count now appears to be a double zigzag higher since this month's low as illustrated above. A flat unfolding since the July high is now the preferred view.

An alternate is a complete impulse wave [i] higher since the July low. The sub-waves for this impulse wave breaks guidelines, so this is not a favored count. In addition, the strong bounce yesterday works better as an 'x' wave in a double than a 'b' wave given the retracement levels reached.

A continuation lower tomorrow for an impulse since today's high is expected. If there is another impulse lower after this, the alternate double zigzag wave [ii] count will become the primary count.

The March-April zigzag-looking rally to new highs and June and July rallies' retracement levels suggest recovery highs lie ahead.

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