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Tuesday, October 4, 2011

Tuesday Market Action

So much for being too easy.  The gap down this morning took me by surprise.  Evidently something was missing from my count, and one more down leg was needed to complete the pattern.  This was a dynamic day, breaking out of the trend channel first on the low side, and then on the high side.

The drop from the close on Thursday at 1164 to today's low of 1074.77 is 85.63.  Today's close at 1123.95 is about 6 1/2 points above the .50, and fewer than 4 points below the .618 retracement levels.  There was a very sharp jump into the close today, covering about 35 points in 40 minutes.  That can't go on very long, but probably has a little life left before the corrective wave is complete.  A range of 1128 to 1132 might be a good target - approximately the .618 and .666 retracement levels.

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