Market comments for Aug. 9th, 2011

The Futures this morning look like we will start with a positive gain of about 130 points on the Dow. Europe is up slightly this morning as well, all less than 0.5% gains. So if you are feeling good this morning that the worse may be over, don't count your chickens just yet. I believe we will have a rally from here and go back over the 11,000 level in the next day or two and maybe test 11,500 eventually again, but soon there after, we will continue the downward trend again going below the lows of yesterday's close at 10,809. This is a good interim time to make adjustments to your portfolio and prepare yourself for more pain to come.

The thinking behind this is Elliott Wave Theory. We have concluded Wave 1 down of a 5 Wave pattern. Wave 2 should be a bounce up and it is impossible to predict its stopping point but I have given you an idea above. Wave 3 will be a down Wave and it will far exceed the lows of Wave 1 and possibly take us down as low as the 9,000 level. I hope I am wrong in my prediction here, for those who get extremely stressed when the market drops like it has.

Productivity data was released this morning and it came in at -0.3% for Q2. The prior quarter was revised down from +1.8% to -0.6%.