Market Update - 9/1/2009

Dow Jones Industrial Average: -185.68 or 1.96% at 9310.60

S&P 500 Index: -22.58 or 2.21% at 998.04

NASDAQ Composite Index: -40.17 or 2.00% at 1968.89

NYSE Internals: 519 Advance. 2546 Decline.

Today was a key day. If we were to close higher, it would mean the rally still had another wave to go. If we closed below yesterday's low, that would mean the rally was over. Well, we closed below yesterday's low, plus some major support. SPX closed under 1000, NASDAQ under 2000 and Dow barely held onto 9300, but closed well under 9450.

The alternate count I had posted yesterday is now in play. Which means, we might be starting another severe Primary down trend. The Primary Wave 2 rally is now most likely over.

The best way to count the waves from the high is i-ii-[1]-[2]-[3]-[4]. We are probably starting [5] down now. A good place for that to end is right around 99.50 on SPY.

The daily chart has completed a nice looking corrective zigzag, and appears to be rolling over. Looks like the divergences I posted about last week are coming into play.

If this infact is the start of Primary Wave 3 down, the start should look similar to what it was at the beginning of the Bear Market. Sideways to downward for now.