Elliott Wave Live: Pre Market for August 11, 2010

The market is at a key juncture. The ON (overnight session) is trading heavy and price has reached critical support that I established at 1103.75. A failure to hold support adds to the increasing key evidence that the rally is over. They are:

1. The Dow was the only indice to take out the June high. The S&P and Nasdaq failed to confirm this move.
2. The S&P and Nasdaq exhibit ending diagonal patterns (terminal patterns) that have not significantly resolved to the upside trend line... accompanied by a volume spike and higher breath. Only on rare occasions does a final 5th wave of an ending diagonal not reach the upper trendline or result in a throw over of that trendline.
3. Analysis in both Time Cycles, Fibonacci Time Ratios and Fibonacci Time Extensions provided the following dates for termination at the daily and intraday chart level (+/-) 1 trading day : 8/10, 8/11, 8/16, 8/17, 8/18.

Bottom line - The S&P and Nasdaq markets need to reach new recovery high or a near term top is in. If they don't we'll be looking for confirmation that wave 3 down was underway or if another pattern had developed