The market closed higher today on lower volume. A few ticks before the close, the market reached the previous extreme of what I believe is wave iv of (iii) as shown on yesterday's chart. Considering this resistance and the overbought condition of the RSI not seen on 10 minute charts and smaller since the morning of Tuesday 9/1/09, the market is in a good position for a decline. On the 1 minute chart shown, the market is clearly overbought.
The wave count is not clear, but a reasonably satisfying three wave structure since yesterday morning has taken form. It fits a channel nicely and is probably a double or a double zigzag with wave y of (iv) being a zigzag.
Problems:
The waves are choppy and not clear.
The rally near the close seemed strong for a 'c' wave.
The count on the Dow must be different given the overlap on Tuesday 9/1/09 morning. It is an even more confusing formation than that of the S&P 500.
Alternatives:
A 3rd wave formed at the close. This would probably be part of [ii].
Wave ii of (iii) just completed. A large gap down would appear soon if this were the case. The wave i of (iii) count would be strange though.
(v) already completed, the market is impulsing up.
Some other larger scale alternatives mentioned in previous posts (this is not primary wave [3], some other bearish count, etc.).
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