The market rallied today breaking above the channel lines and resistance levels shown yesterday. Because of the strength and retracement this rally since 10/02 has shown, the primary count has changed to a more bullish count. This is the count that I suggested as a possibility for the last several days.
Shown above is a 60 minute chart of the Dow covering the last 60 days. It illustrates the completion of a zigzag (XX) of [2] wave, the second correction of intermediate degree since the March 2009 rally began. Since the previous (W) and (Y) waves of this degree were zigzags, the next wave, wave (Z), must also be a zigzag. So wave A of (Z) appears to be underway. At this stage wave [iv] of C of (Y) of [2] wave is not a possibility on the Dow Jones Industrial Average since there was crossing as shown.
Although more unlikely, it is possible that the first leg of (XX) completed with more to come, that is wave A or W of (XX) may have completed. Also possible is a more complex [iv] wave still unfolding that will complete without overlapping the 8/7/09 peak. A triangle or double are the most likely potential [iv] waves.
These are bullish counts, but in my estimation further advances will not be powerful due to the clear waning momentum of wave [2].
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