8/3/11

I expected the market to move up early yesterday before falling to its final target of Minute [iii].  It did just that.  It overshot somewhat, falling to 1234.56, which was a ways under the 1249.01 target.  The reversal seemed potent by the standards of the last several days, and MACD went further positive than it had since the Minute [ii] top, which lends further credence to the idea that Minute [iii] is over.

If this count is correct, we should be in Minute [iv] now, which should not penetrate 1295.92 - or if it does (except for just barely), then it is a diagonal and Minute [v] should be longer than Minute [iii] which would likely indicate a Minor 1 low of under 1200.

As it stands, the 38.2% retracement off the current low stands at 1276.36.  The 50.0% retracement is at 1289.56.  Both are likely stops.  The 61.8% is at 1302.89, which is a likely retracement if the diagonal count is in progress.

The KRAP was up 20.69, closing at 1626.78.  All five components were up.  It may, however, be forming the right shoulder of a head-and-shoulders pattern....

Also, there does appear to have been a slight negative correlation between UUP and the SPX over the past three months (stocks go up = dollar goes down), but the correlation is slight (R^2 = 0.34).  On only fifteen trading days over the past three months has the dollar moved in the same direction as the S&P 500, albeit it has done so on four of the past eleven days.