Friday, August 26, 2011

Friday 8/26/11 Market Update

Continuing forward with the count in yesterday's update, corrective zigzag wave [b] lower should be complete. An impulse wave higher was likely drawn out today with short term action following today's high likely a setup for at least one additional impulse higher which should complete at a level beyond Thursday's high.

A wave (4) flat+zigzag double is now the primary count and by a good margin. Short term action suggests last week's W high will be reached by zigzag wave Y early next week. 1220 or thereabouts should contain wave (4). If this level does not stop the rally, one of the more bullish alternates above will become the primary count.

It looks fairly clear that the July-August collapse is a 3rd wave (this has been the primary count for several weeks). The sideways consolidation this month supports the view that an impulse lower since May is winding down.

There was likely a zigzag drawn out that began at the March 2009 low. This is a bearish sign for the market. See the very long term picture here.

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