Thursday, July 9, 2009

No clear count yet

Not much to say today except point out a few observations. The wave count isn't as clean as I like to see it right now. And that usually means that the structure is going to be complex. What does that mean? Well, if I were to take the count to be most bullish, then we are currently putting in some kind a-b-c corrective move with some subdivisions. Not to say that the down move is over only that the selling will continue to be orderly.

What if I take the complexity to be bearish? In this case, then we are subdividing and gearing up for a massive push to the downside. And that push to the downside should start tomorrow.

Another intersting note today is that the healthcare sector (XLV), which is one of the 4 biggest components of the SPX sold off hard today. This has been the last sector of strength, and should it close below 25.40, then I think we know much lower prices are ahead of us. A move below today's low should also kick the selling in overdrive.

A break of the channel support line will also be our first clue that this will be an impulsive move down and not some abc-x-abc move. Let's see what tomorrow brings. Today's price action was very encouraging.


Post a Comment