Thursday, August 26, 2010
....and Again, the Larger Trend Remains Down
I thought that the market was in either a "B" or "X" wave when the market started to decline later in the day. This would mean another strong rally higher, well into the 1060 - 1081 zone I mentioned in last post. But the last 30 minutes of trading erased that from being a high probability. The market sold off sharply suggesting that perhaps wave ii of (iii) has already topped and now wave iii of (iii) of 3 of  or C is now underway. Obviously there should be little doubt this is occuring since a wave at this degree would be almost a straight line down. So a sharp shot lower beneath 1039.83 should confirm that this is indeed occurring.
It is possible that a flat correction could take place with a break of 1039.83, but if it's a sharp shot down on the heels of today's sharp shot down into the close, it would mean that a flat correction is not a high probability.
Above is the alternate count which is also quite possible. This short term bullish count suggests that the decline later in the day was either a wave B or X of a wave ii correction. If so, I expect the market to charge higher into the 1060 - 1081 range before wave ii tops. A sharp decline beneath 1039.83 would make the count suggesting wave ii is still underway very unlikely.
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.