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Saturday, July 31, 2010

Weekend Charts and Stuff

Although we can imagine a count that will finish out this market within a week or so, I must admit I really like the bearish side of things. We have the primary count of an ending diagonal wedge because we'll give the bulls the benefit of the doubt and the potential pattern the benefit of the doubt.

(If a potential wedge is staring you in the face, we have to accept thats what the market intends to complete)

There is not much point in making a lot of words, as we'll know soon enough come Monday what the market may have up its sleeve.  Beginning of the month after an 8% run-up should mean some sector rotation/re-balancing to come at the least.  That can work both ways for both bulls and bears so again, we'll just have to see how it shakes out.

But we do have pesky resistance and we do have an eye on that 1070-1072 gap area in a test as support. And we do have a valid 5 wave structure down now and a seemingly a-b-c counterbounce.  So going with what we got, I like the bears' chances.

The top bear count (Minor 2 has topped) takes all this into account perhaps. Question is do I have the wave degrees correct? I suspect its close enough for now: We are looking for Minute [i] of Minor 3 down and a decent target range is from 1000-1030 for starters. Remember the first wave one subwave of a higher degree wave three attempts to advance prices (in this case lower) than they already have been.  So if 1040 is an orthodox Minor 1 low we should at least expect 1030. If 1010 is the orthodox than we should expect 1000. Hence, 1000-1030 is a minimum Minute [i] target off  the top of my head. Thats a minimum range remember.
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