Thursday, July 23, 2009

Wednesday 7/8/09-Thursday 7/23/09 5m Intraday Chart

The market continues to rally and has eliminated the wedging pattern from the picture. Because of the breadth and strength of the rally today, it appears to be a 3rd wave. Wave (iii) of [v] seems to be the most likely scenario based on size and time of occurrence. The above chart has been relabeled to reflect this.

Wave (iv) appears to be underway. Wave (ii) was a zigzag correction so (iv) may be a sideways correction by the rule of alternation. Watch for a triangle.

Note that some technical divergence has been lost. This with a new market high gives doubts about a substantial pullback.

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