Tuesday, June 22, 2010
The Market Should be at the Start of a Very Aggressive Decline Phase
The market continued to the downside after its big reversal yesterday which is well in line with a wave 2 top. The market looks to be declining impulsively in nice smooth downward waves. A reliable count should develop in a day or two and I'll post the short term count here. Today's decline not only followed a big reversal day with impulsive-like action, but it did so with massive selling volume compared to up volume with down volume representing 92.5% of the total volume today, there were only 21 S&P stocks that closed up, and there were almost 4 decliners for every 1 advancer on the NYSE. The only kink in the armor for the bears is that today's volume was nothing to be impressed about as it held way below its 13 moving average on the NYSE. But that may change tomorrow. We should see increased volume on declines if the above wave count is correct.
I've adjusted the count to have us in a wave 3 of  or C, but it may change to a wave (iii) of 3 of  or C if the structure dictates. Right now the count I have above does not have EWP's "right look" in my view since wave (ii) is so much small than wave (iv). But it violates no rules so it does remain valid. And my other count would have its wave (ii) being quite long in time and price to be part of a wave 3 of  or C, so that one is suspect as well. Regardless of which of the two counts are correct, the market should be under tremendous selling pressure in the coming days. Without impulsive action to the downside on strong volume in the coming days, this above count may become vulnerable. Look for heavy selling, whether it be methodical like today, or a panic sharp shot downward. The market's larger trend right now should be decisively down. Otherwise some other structure is unfolding that I haven't listed yet. I would recommend watching the market's closely and being active in it right now. Opportunities like the one we MIGHT have right now are extremely rare.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.