Tuesday, August 9, 2011

Tuesday 8/9/11 Market Update

After a brief leg down today, a soaring rally ensued.

The view has not changed since yesterday's update; the suggested count yesterday that took into account the oversold condition of the market is being used above. The sharpness of the rally today is an indication that selling has stopped with the market in rally mode.

Given market action since March 2009, it is likely that an upward zigzag is complete. The count posted here several days ago shows that count.

From this point forward, another upward zigzag for a double zigzag since March 2009 is a possibility. However, simplicity is preferred and this suggests a test of the 666 March 2009 level.

In addition, an impulse wave down since May 2011 is most likely underway considering the sharpness and price distance of the panic selling in relation to the May-June wave down. To solidify this view, the market rally that is underway must fail in wave [iv] of 3 of (3) territory or slightly above. A sideways wave 4 is the most likely scenario, but an extending wave 3 underway is also possible.

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