At least it channels.
My best bearish squiggle count: Hey I was trying to obey the rules dagnabbit!
[Update 7:38PM: The FTSE 100 and GDOW I have as expanded wave 2 flats. The target areas are somewhere at least in the blue boxes. That is my guideline on wave 2's is that they will retrace into this "virgin space" above the previous subwave four peak. Such is the nature of wave two's.
So this is a test for that blue box guideline. I don't know if the blue box thing will work or not in this instance - the American indexes have quite a different look going on with its waves and the amount of overlap they have. Additionally the FTSE has that black candle at the virgin wave space which is most unusual.
Now if you can imagine a move to the blue box area will happen, surely the American markets will likely be in sync with more upside also.
[Update 7 PM: First, never mind what the overall Minor 1-2 count may or may not be. Both the Minor 2 expanded flat and the Minor 2 zigzag count imply the same thing: Minuete (v) is starting up (if the market makes new recovery highs above the recent highs) so its a moot point at this stage and in the end both could be considered valid counts. We'll sort it out in the end.
GDP FRIDAY SUGGESTS SOMETHING BIG(GER) IS GOING TO HAPPEN
Back to the GDP report tomorrow: Here is some propaganda for you - but it does contain the basic facts of what they reported and what "economists" expect: http://www.marketwatch.com/story/gdp-data-may-quell-or-spark-double-dip-fears-2010-07-29?pagenumber=1
No matter which way it goes, I think we can all feel something is brewing.
In the end, like some implied in comments, it won't matter if we get a new recovery high, that wave (v) to 1122, 1132 or 1140 or the market gets a wake up call tomorrow. Minor 3 down is the next wave to play and soon. All we are doing is tweaking the final model here.
The dollar hit 50%. Euro barely has hit its 38.2 Fib.
The only major index that can be said to have a good 5 wave structure down from a peak is the DJIA. Can we count today as a 5 point truncation event for the SPX and such? Well I don't think so. Truncation suggests extreme weakness and that is hard to argue when we had such a vigorous rebound and the day ended with more stocks up then down despite the red day overall. The Wilshire was so far from its recent high today that truncation cannot be counted in my estimation.
EARLY DIVERGENCE LED TO QUICK WEAKNESS
But the DJIA new recovery high today diverged with the other indexes which showed some short term weakness that was pounced upon. But support held and buying ensued. 1107 was actually regained.
GDP REPORT TOMORROW
Lets face it, tomorrow's preliminary GDP report is much anticipated. From a 5.8% qtr to a 2.7% qtr, the market wants to know what the trend is for last qtr. Will the number be correct or true? Probably not, at least not the preliminary it'll be likely beefed up. Consumer Metrics has their take on things. Page through and read their July 21st commentary. http://www.consumerindexes.com/
Consumer Metrics says we actually contracted since early January which I tend to believe.
Yet if BEA announces 3.1% growth (they forecast 3%) what will the market do? I can only go by the waves. So far I only see overlapping down (except DJIA) which by nature is corrective so thats what I got to go by for now. But you know the game. If the algo's get a hold of a news item and if there are no sellers, they can wreak havoc on the bears.
SO WHATS THE PRIMARY COUNT?
I hesitate to change counts but in this case it wouldn't be a big deal. It would be a flip-flop between Minor 2 being a straight [a][b][c] zigzag (since March lows) or the more complex Minor 2 expanded flat (which implies that this rise since the July lows is a 5 wave move not a zigzag.
So again, the primary count is that a new high will occur on the SPX. Why? One reason is because we don't yet have a 5 wave structure down or even a good "half" structure to suggest otherwise.
In a nutshell: The overlapping [c] wave would fit perfectly here for the final "push" of a market that is in way over its head. That overlapping 5 wave structure would suggest an ending diagonal pattern. ED's also suggest a subsequent price collapse to beneath from where they started (1010 SPX) and this would be a perfect kickoff for Minor 3.
(also if the SPX went from 1092 to 1132 in 3 days, how else could you count it from here?)
A huge overlapping Ending Diagonal wave [c] move for the market would also be a fitting way to end the struggle that Minor 2 has displayed so valiantly for the past 2 months.
WHAT IS THE ALTERNATE COUNT?
Simple: The market has seen its highs and today's midday rally was just a retrace back and down we go in Minor 3 tomorrow. Perhaps GDP report is a real wake-up call to the market (maybe they report 1.5% growth)
CURRENT ALTERNATE COUNT - MINOR 2 TOPPED - IS SHOWN HERE ON THE DJIA - WE'LL WORRY ABOUT THE OTHER INDEXES LATER.....