Monday, August 31, 2009

Thursday 8/27/09-Monday 8/31/09 1m Chart

This posting is a follow-up to my previous post earlier today. i was relabeled and today's sideways price movement labellings were updated.

Notice the non-impulsive characteristic of the waves off the low today. There was a rally near the close, but I believe that was only a part of the correction, probably the end of a flat. There are various ways to label the sideways action but prices will probably turn lower tomorrow regardless of the exact labellings. That sell-off may be wave iii of (iii) as the Alternate counts suggests (that would be another gap down) or wave v whose magnitude is smaller than that of wave iii's (so iii is not the smallest). Since first waves are usually not larger than 3rd waves, the alternate count may be the best count. Also note that there was wave crossing on the Dow 30 right at the close, so the alternate is applicable but the above S&P 500 labellings are not. The correct count should be revealed tomorrow when the magnitude of the drop is seen, assuming that actually happens.

Today did not resemble a traditional "3rd of a 3rd". The sideways move was surprisingly long lasting and the rally at the close seems a bit out of place.

The price action since the peak looks sloppy, not particularity impulsive. Could this be a correction since the top?

A zigzag pattern is unfolding since the peak.

This is a correction calling for a continuation of wave C. But there is strong resistance above 1040 and this market is so overbought.

Wave [iv] has not completed. This would be a remarkably wide correction.

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