Tuesday, December 13, 2011

Tuesday 12/13/11 Market Update

With yesterday's low taken out today, the short term count has changed since yesterday's update. The termination of B of (Y) is expected tomorrow as described above.

The change to the short term count is of little effect to the larger view. The proportionality between (W) and (Y) is still very good.

Also note the corrective waves to new highs last week. This is a strong sign that a downward correction is underway since an ending diagonal is not an option.

The market needs to plunge to draw out a "3rd of a 3rd" wave lower, moving strongly under yesterday's low to create a bearish picture. The downward action remains choppy at this time and is not tracing out a contracting pattern. It is debatable whether the market has enough energy to continue its short term downward trend in longer-term bearish fashion.

The best alternate at this time is a downward impulse since May 2011 with an upward wave 'b' or '2' double zigzag correction following that will not make a new recovery high. The primary count still expects a new recovery high and perhaps all time high with a double zigzag since March 2009 still completing. As illustrated above, a downward sideways correction is still likely underway however.

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