The market continues to drift upward and is at resistance with a clear loss of momentum. Volume has been waning since the strong day on 7/30/09 (marked wave (iii) on the bottom chart). However the November gap was filled today and the market closed above 1000 once again.
That gap and 1007.51 resistance are shown on the top chart, a linear scale daily bar chart. Notice the channel with the current market price at the top of it. The channel does not work as well on a log scale, but a line can still be drawn connecting the top three points. This line also applies to the Dow 30.
On a smaller scale, wave crossings continue. It is now difficult to make out any wedging on the scale shown, it looks more like a channel. An ending diagonal may have started long before the possible one shown, there is certainly wedging on larger scales. Dan's chart of the September E-mini S&P 500 index futures shows a nice rising wedge pattern. The market will need to soar to invalidate the pattern. This is not likely given the divergence and loss of momentum in the market.
Remember the rising wedge pattern is a technical pattern that does not necessarily need to be an Elliott wave ending diagonal to create a bearish bias. For instance look at the marked iii wave today (ignoring the chart error). It was a rising wedge that set the stage for a sharp selloff.
The comments expressed in yesterday's update are still very much true. Counts are still guesses but the wedging is still very evident on a larger scale. I believe an ending diagonal is still forming, even if the above count is proven wrong.
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