Tuesday, September 1, 2009

Friday 8/28/09-Tuesday 9/1/09 1m Intraday Chart

There was a small gap down at the open then a rally following that. The push up overlapped Friday's low with Friday's high exceeded on the Dow 30. An ending diagonal can be seen at the peak which set the stage for a large sell-off. In 90 minutes, the S&P 500 lost over 25 points. It has been a very wild but interesting day so far.

Although it has been difficult to place confidence in wave labellings lately, market action today has been very telling. The market appears to have completed (i) with a truncated wave v located some place or another. Wave (ii) followed giving doubts about the market actually having topped in the first place. That wave looked impulsive and retraced quite a bit of wave (i). The sharp decline following is likely part of wave (iii) as the decline is already longer and sharper than wave (i). Some bullish alternatives are mentioned below.

For now, it appears that wave i of (iii) of down has completed. I would expect a zigzag wave ii correction completing before today's close. If the correction is sideways, that improves the chances that wave (iv) is actually unfolding. In my estimation, 1000.26 will be broken later today or tomorrow as wave iii of (iii) or (v) unfolds.

It is possible that this is the 'c' wave of a correction but these chances become less and less as the market continues to drop.

A double zigzag down may also be forming, this this being the "a" wave of the second zigzag.

Any correction down would best be seen as wave [ii] of C of (Y) of [2].

"3rd of a 3rd" unfolded today but wave 1 of the inner impulse down was heavily retraced. As mentioned above, that point was actually exceeded on the Dow 30.

The degrees after the top may not be correct. They may not be known or some time.

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