Wednesday, September 2, 2009

Friday 8/28/09-Wednesday 9/2/09 1m chart

Market prices have been drifting lower to sideways since yesterday (Tuesday) afternoon. The market appears to be a winding down after the "3rd of a 3rd" wave Tuesday mid morning. It appears that wave (v) is now underway which will complete an impulse down that began Friday 8/28/09. Expect prices it to reach the 980s with potential to move lower. I would expect prices to move lower tomorrow morning with a bottom being reached that same day. If prices move noticeably higher instead, a 4th wave is probably still forming.

Some targets are shown in blue (the extension of the length of (i) from the end of (iv)). Expect prices to reach at least the neighborhood of the 100% figure of ~983.5. Note that 980 or so was the beginning of C of (Y) of [2]; it may provide good support as (v) of [i] completes.

When [i] completes, prices may shoot up in a wave [ii] zigzag correction, a typical correction for a second wave. Although the formations seen on this chart are not entirely clear, look at the corrections so far, they have all been very typical. All but one of the minuette, subminuette, and micro 2nd waves were zigzag corrections whereas all the 4th waves of micro degree and higher since Tuesday (ignoring the ending diagonal) were sideways corrections! Primary wave [2] probably completed last week, and that too was a zigzag correction. To put it another way, it is not a good idea to trade against the larger trend during 4th waves.

The choppy waves since yesterday is some other unfolding set of corrections, it is not clear. That area does look like consolidation however.

The alternatives of larger scale discussed in previous posts are still valid. But note that C of (Y) of [2] has been almost completely retraced.

Degrees may not be correct. Time will tell.

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