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Monday, July 23, 2012

Monday, 7/23/12 update

Surprisingly, and despite the bearish looking picture, the sell off from Thursday through today's low in the ES did not rule out the bullish EW count.  The low today at ES 1332.00 precisely hit the fibonnaci retracement level of .786 of the prior rally sequence.  Under EW rules a 2nd wave can retrace theoretically down to 1 tick above the low marking the start of the 1st wave, so as long as the market doesn't fall below 1319.75 the bull count, and thus the potential bull market, is still alive.

The market is bouncing off an obvious oversold condition.  This bounce will tell the tale - if it keeps moving up and rally's strongly past the 1376 level then the case for an IT bull market solidifies, if it is just a bounce and soon turns south and down through the 1319.75 level then the IT bear alternate is probably in play.
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