Friday, August 28, 2009

Thursday 8/27/09-Friday 8/28/09 1m Chart

The market rallied to 1039.47 today before selling down and closing lower for the day. As discussed earlier today, an ending diagonal [v] wave is the most likely formation that is unfolding. This implies wave C of (Y) of [2] is not over but will be soon, probably before Labor Day.

Expect wave (iii) of [v] to carry into the low 1040s early next week. After that point, a good estimate can be found for the completion of the rally but it will probably be in the 1050 area.

Wave w of (iii) is very shallow and double zigzags are more rare than single zigzags. Wave y will need to rally considerably unless a rare triple zigzag is unfolding. Perhaps (ii) has not completed and needs to be relabeled.

(ii) is not clear but does not look like a 5.

Those expanding leading diagonals may not be correct, they are very rare.

Some are shown on the chart.

Perhaps wave [i] unfolding, not wave [v].

Wave [i] topped and this is wave [ii]. That or wave [v] topped. Not likely, the labeled (ii) wave does not look like a 5.

There is no ending diagonal, wave (i) was an impulse. It looks like 7 waves though.

There is a larger correction still unfolding, perhaps [iv] has not completed. That would be a very wide correction however.

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