8/26 Addendum

Posting an overview of the count and the tactics leading up to the I1 bottom next week.
To me, looking down we are in Primary 3, Intermediate 1, Minor 3, Minute 3, Minuette 5, Sub-Minuette 3.  EWI changed it's labelling in order to allow more running room for Minor 3.  However, with I1 due to bottom next Wednesday/Thursday it is logical for either Minute 3 or Minute 5 to end at that time.   I believe it will be Minute 5 that ends. 

My thesis is that we are re-testing the May/July lows in preparation for breaking them.  We are coming down to moving-average support temporarily.  One would expect the market to pause at these levels, perhaps building a Minute 4 rectangle, before plunging into a quick Minute 5 bottom.  We have an excuse for a dump tomorrow in the form of "news".  The daily technical composite is reaching into a sell signal, though it may not be there yet it is close.  We have 4 trading sessions to finish Minute 3, Minute 4, and Minute 5 if there is to be a sizeable relief rally during the I1 rising stage starting later next week.  This scenario is well within the context of a sustained, devastating decline through October.

First, the daily technical composite.  It peaked at +22 just 2 days ago.  Although +24 is an official sell threshold caution is in order as there have been several declines terminated at +22 over the past few years.  By the time Minute 5 is done I expect it to be +24 and perhaps higher, depending on the depth of Minute 5.

The I1 bottom is pressing upon us.

While I1 bottoms Thursday I only expect a decline into mid-Thursday due to the fact that the I1 value Wednesday is so close.

20100826 29.52879

20100827 27.68586
20100830 26.7774
20100831 25.81199
20100901 25.28408
20100902 25.06659
20100903 25.51281
20100906 26.69725
20100907 27.91625
20100908 29.58433
20100909 31.06375
20100910 32.49334
20100913 32.15619
20100914 31.46442
20100915 29.76997
20100916 27.14117
20100917 24.71507
20100920 22.96243
20100921 22.29074
20100922 21.8606
Notice that the I1 rising period lasts a week and spans greater than 5 (.5 in the adjusted I1 on the chart) and peaks greater than 32.25.  This indicates that I will not hold short through it.  If we have a conclusion of the first significant 5 down of Minor 3 next Thursday then a week is about the expected correction time (Minor 4) for a decline of 18 days. 
Since the next degree above Minor is Intermediate and this degree is expected to last 6 months to 2 years I should be classifying the waves as Minuette instead of Minor.   In order to avoid changing degrees in the midst of an I1 cycle I will wait until the I1 bottom to re-classify my wave count.  The forecasting implications will remain the same, only the names will change.  Actually, I shifted from the appropriate degree in response to EWI's shift over a week ago.  EWI has shifted again to a count that I do not believe is appropriate for this stage in the I1.
Normal caveat:  All of the above is theoretical and subject to the market.