Wednesday, June 24, 2009

Tuesday 6/23/09-Wednesday 6/24/09 1m Chart

This is an update to my earlier posting today. A double zigzag [ii] wave is now shown with an impulse sell-off from its top. Thanks Kenny for your great ascending triangle idea! Those waves at yesterday's close are best seen as zigzags.

If we did have a triangle, the market was only in correction (triangles are only allowed near the end of patterns). It is the reason [ii] is marked at the top.

This structure as the count shows is very bearish; tomorrow could be a very weak day with a big gap down. The market continues to operate within the bearish channel since 956.23 as Dan has shown. 872 (projecting the length of [i] down from [ii]) at the least should end [iii] if it does occur. If it is less then we may be completing a corrective wave as one of my alternatives discusses. In any case when a 5 wave impulse structure occurs off of a top, we will see another impulse wave unless the 5 wave count was not correct.

[ii] retraced between 50% to 61.8% of [i] which is normal for second waves. (ii), if it is correct, was a 38.2% retracement of (i).

(i) is not very nice looking but the Fed announcement did come out in the middle of the pattern.

It is still difficult to make out yesterday's waves. They do not look impulsive though.

[ii] is really an 'a' wave and (i) is really a 'b' wave completed or still completing. This would be making a flat or some other correction. This count would probably imply that [i] was actually [c] or C and we are going to complete a double zigzag with some [b] or B wave in between them. The alternative is a wide [i] wave but that is not likely. (i) could turn into double zigzag if it is not one already.

We will be completing a rare triple zigzag with the 3rd zigzag starting today.

The degree labellings may be off.

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