Market Update - 8/24/2010

A lot has happened over this past week that I have been away. We got the wave (ii) bounce to 1100, which was expected. After that, we got a very quick reversal down, which was also expected. I had called for both of these to happen while I was away.

One thing that is concerning to me is the market internals from today. This morning, the drop we had was very bearish and it looked like it would continue. Market breadth was over 47:1 in the morning. Only problem is that the bears couldn't keep it down. The market did come up in the early afternoon, but breadth nearly came back to the 0 line. We were between 3:1 and 5:1 for most of the day after that.

For now, I see 4 waves down from yesterday's high. If this count is correct, we should get another quick down move tomorrow that should break 1044 on the SPX. It may extend further. This will then complete wave iii and wave iv will then start.

My concern with this count is that [3] of iii wasn't really that strong, and didn't last too long. And if wave [5] of iii is not extended, wave iii as a whole will not be that lengthy, considering that this is Minor wave 3.

I am also updating my charts of the day, which need some catching up to do. So please take a look at those. They should be updated within a few minutes of this post.