The market completed what looks to be a leading diagonal today before correcting that pattern for most of the day. Selling pressure again came into the market at the close. The market looks poised to move lower in the form of a 3rd wave within wave B, the correction of the last zigzag within primary wave 2. For the same reasons discussed yesterday, it is very likely that A has been completed.
[i], a contracting leading diagonal, was retraced by almost exactly 78.6%. This is normal for a leading diagonal pattern. Also notice the nice wave relationships within [ii].
Notice that every sharp decline has been impulsive but the critical larger advances such as [i] have not been impulsive.
B can one of many patterns patterns. Some targets were discussed yesterday.
Finally note that the dollar was very weak today. The market usually rallies on these days but today it did not. I believe both markets are inflecting. Expect the market to remain weak and the dollar to continue bottoming.
Problems:
The waves are choppy and do not look impulsive on a larger scale.
Alternatives:
Kenny's count in which the 5th wave ended the primary wave 2 flat. The substructure is the same, but this means the market is now in primary wave 2, not wave B.
Kenny's expanding leading diagonal idea. This still implies a lower move but is a very large pattern. It may be an [a] wave.
[i] may be an [a] wave of some larger correction.
Degree labellings may be off.
Other creative impulsive labellings.
blog comments powered by Disqus