Tuesday, July 21, 2009

Wednesday 7/8/09-Tuesday 7/21/09 5m Chart

The wave count continues to be unclear as the market pushes up against 956 resistance. One possible structure is shown but this is far from certain.

Dan posted a triangle idea earlier today and at first I did not believe it. However looking closely at the marked (b) of [iv] wave, it is very difficult to make an impulsive structure out of it. A triangle's 'b' wave is the most likely count for this structure. This and other ideas made me reconsider a possible [iv] wave triangle forming.

Look how nicely the 1, 2, 4, and 5 waves fit the above channel lines. Using this and other clues such as known triangle waves and other probable corrections that overlap previous waves, the above count was derived. Also notice the choppiness of the market as of late, the market appears to be winding down showing 5th waves of many degrees. The wedging has now vanished. Some waves still do not look right but that is just the nature of this rally, this is not a textbook wave formation.

Finally note that the possibility of a double zigzag expanding flat X is not valid as the market broke though 956.23 by a slim margin. This idea was discussed some posts ago but is now off the table.

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