Sunday, October 4, 2009

Friday 10/2/09 Market Update

The market closed lower Friday, unable to recover from lower opening prices. Choppy sideways waves were seen for the remainder of the day.

Shown above is a 1 minute chart covering the last 4 days of trading. It appears that the market is undergoing a winding down process with 4th wave sideways corrections stacking up as prices move lower in a stair step fashion. There is a short term oversold condition on the market.

The current correction is unclear, but it appears that (iv) or iv of (iii) is completing or has completed. If prices move higher tomorrow or choppy waves continue, (iv) is likely still underway whereas if prices move lower in an impulsive fashion, iv of (iii) seems most probable. This an observation of wave size as it appears now and is only speculation. In any case, impulse wave [i] seems to be on course to complete some days from now. Wave [ii] will probably be a zigzag higher retracing at least 38.2% of [i].

Above is a YTD daily chart of the S&P 500. On Thursday the CCI, Ergodic Oscillator, and MACD were all below the 0 line. This can be viewed as a sell signal. June was the last time this condition was seen, the time when wave (X) of [2] unfolded. Whether or not the rare (XX) wave is unfolding remains to be seen.

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