Wednesday, July 15, 2009

Wednesday 7/15/09 Market Update

Today the market rallied off yesterday's triangle but more than expected and with higher volume than the previous two days. There are still various counts but the X wave high was exceeded today giving doubts about the head and shoulders pattern playing out. It is still possible but not as likely.

Dan posted a chart summing up the past few weeks. The WXY double zigzag fits in a channel nicely and the waves are well proportioned. This pattern just makes sense.

There are various counts for today's rally but it does appear to be (v) of [iii] that has completed or is completing. The wave is very extended already but may have some small upside remaining. The [iii] wave retracement should end around 920-910, that is 23.6%-38.2%. 905 is the [B][D] triangle resistance line as charted yesterday. This pullback should set the stage for [v].

After [v] completes there will be a complete 5 wave pattern, probably wave 1. This may actually end up being the 'c' wave of X as an expanding flat however. The retracement of the possible 1 wave will be telling. Obviously moving below 869.32 means 1 was not 1. For now the market does appear impulsive to the upside, it will probably be days from now before that has a chance to be refuted.

[i] looks more like a zigzag and was retraced heavily. But it seems too small to be an 'a' wave.

The triangle yesterday was a 'b' wave of something.

Perhaps the X wave is not complete but is an expanding flat forming.

A triple zigzag is forming.

A different impilsive count covering the last several days for example (iv) of [iii] may actually be [iv].

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