Market Update - 6/21/2010

A huge reversal day today. We had a really big open, nearly 14 SPx points. We made our high at 1131 then started to slowly come down. Later in the afternoon, the sell off accelerated.

From our lows at 1040 a few weeks ago, we have been tracing out a Minor wave 2. We have been tracking minute wave [a] since then. There were some areas where we thought wave [a] would end, but it kept exceeding those pivots. But with today's reversal, it may be safe to say that wave [a] has ended. We have also retraced 50%

Wave [b] could take us to anywhere between 1095-1100. This is the target for now, of course it may change as more waves within [b] start to form.

On that same chart, I have the alternate count marked. The alternate is that the entire Minor wave 2 is over, and this down move will be the start of Minor wave 3 instead of just a [b] wave within wave 2. On any down move, it will be key to watch the internals. If the internals are very strong to the downside, it could be a wave 3.

The daily candle stick is also a pretty bearish one. The fact that we closed today's gap up is also very bearish.