Market Update - 6/24/2010

The key pivot of 1090 failed to hold. As I said a few days ago, if this level was broken, it would be very bearish. There is good evidence now that Minor wave 2 may have ended. However, breadth doesn't support wave 3 action, but we do have 5 waves down off our highs. A pretty good looking impulse.

I don't want to try and catch a bottom, but I am going to label today's low as the end of wave (i). We could get a bounce back to 1090-1100 soon for wave (ii).

The 5 wave structure from the top does look complete, but again with this being Minor wave 3, expect downside surprise.

Here is a rough wave count from the highs @ 1131 a few days ago. Again, this is what I see on the smaller time frame.

If this is going to play out, we could get a nice drop early tomorrow, as we are currently within wave (3) of [5] of iii.

The daily charts also starting to roll over. We have gone down a little bit too much for this to still be a wave [b].

If we break that trendline, we could easily get to 1040-1045.

The only concern I have is that the internals are not confirming any sort of wave 3. Wave [b]'s are typically not that deep, but the market could be trying to fool us. Any upside bounce needs to remain below 1100.