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Thursday, July 22, 2010

S&P 500 - Odds favor a shift to the alternate count


The rally today (well beyond 1,085.20) has shifted the odds in favor of my alternate count - The leading diagonal - As wave 1 down. The rally from 1,011.52 to 1,099.36 wave wave A of 2, the decline from 1,099.36 to 1,057.08 was wave B of 2 and we should now be in wave C of 2 with a target zone in the area from 1,135 - 1,140.
Wave 2 is a Zia-zag correction (5-3-5) that means that wave C shall also be a 5 wave rally to the upside. Minor wave i of C rallied from 1,057.08 to 1,088.86. Minor wave ii declined from 1,088.86 to 1,057.08 - A 50% correction of wave i and we should now be in minor wave iii up. Minor wave iii would ideally rally up close to 1,116 before some kind of flat correction or triangle sets in.

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