Market Update - 7/16/2010

The primary count stays alive with today's down move. We have remained below the key pivot of 1100, and have now reversed nicely away from it. We have also broken below 1085.

The next major pivot to the downside is 1065. We did slightly break below it today, but it wasn't a very significant break. If we can get below 1065 on Monday, 1050 seems like a good target.

Any bounces to the upside have to remain below 1080, however.

The daily charts are now starting to support the 1-2-[i]-[ii] pattern. If we are in wave [iii] of 3, we need to basically continue to have swift down moves with very little bounces along the way.

The only concerning thing for the bears is that the internals were not really supportive of a wave [iii] today. Breadth was as low as 31:1 negative early today, but closed at 23:1. If we can get some bearish internals on Monday, it would help the bearish case.

I will try to post a weekend update with possible alternate counts that could also be in play, so try to check back for that.