Market Update - 8/28/2009

Dow Jones Industrial Average: -36.43 or 0.89% at 9544.20

S&P 500 Index: -2.05 or 0.20% at 1028.93

NASDAQ Composite Index: +1.04 or 0.05% at 2028.77

NYSE Internals: 1514 Advance. 1494 Decline.

Looks like I was right about the gap up then pull back and rally into the close. Except the rally wasn't as strong as I expected. From yesterday's post: "I am expecting a gap up tomorrow, then a small little pullback and then a run up towards the end of the day."

The sell of in the morning did seem promising at first, but that died fairly quickly, just like any other minor sell off in this rally. That makes me come to a conclusion that the rally may not be over yet, and that the pull back was just wave (iv) of wave [V]. If that is the case, wave (v) of [V] should complete on Monday/Tuesday.

Main count:

The alternate count is that today was infact the top, and we are starting a severe Primary Wave 3 down. There is a possible wave structure that does support today being the top, but I personally don't like it. Only because a lot of the waves are just squished in there together, and the structure seems fairly short. But we have to keep in mind that Wave 5's have NO minimum time constraint.

Alternative count:

The HUGE neagtive divergence on the Daily RSI does also support the top of a wave 5 today, since wave 5's usually set up some type of negative divergence.

I'll be posting a weekend update on how I expect the rest of the Bear Market to unfold.