Monday, November 16, 2009

Monday 11/16/09 Market Update

With somewhat higher volume, stocks rallied today. Two wave count options are shown above although their place within the larger wave structure is not exactly clear. In the short term, higher prices may be ahead early tomorrow if a flat iv wave has formed.

1113.69 was reached on the S&P 500 today, another new high. As discussed in Wednesday's post, breaking above 1110 or so invalidates the expanding diagonal C of (Y) of [2] wave. So unless a [i] of C had different orthodox top, or a truncated 5th wave is still ahead, another wave count is required to describe the market action.

Regardless of the wave patterns, the top of wave [2] should be approaching very soon, perhaps this week. One reason is the lack of breadth in the rally. The bank stocks are still looking weak with the Dow Jones Transportation Index still yet to confirm the recent rally in the Dow Jones Industrial Average (although it is very close to doing so). The Dow broke out 6 days ago. The major indices are also in weak technical positions.

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