Monday, November 9, 2009

Monday 11/9/09 Market Update

Above is a 5 minute chart of the S&P 500. Buying was seen throughout the entire day today but on less than impressive volume. Volume was slightly higher than it was on Friday, but not higher than any other day since the beginning of this rally 6 days ago.

A new high was reached on the Dow today but it was not confirmed by the Dow Jones Transports, NASDAQ, or S&P 500. So the buying seen today may not be part of another push comparable to those seen since the rally began in March. The low volume also supports this hypothesis.

On the other hand, if the rally continues after a pullback tomorrow, this rally is just another leg of primary wave [2]. But no matter the case, a pullback should occur tomorrow. A sideways correction could be a 4th wave of a larger rally than the one illustrated in the chart above.

A linear daily chart of the S&P 500 is shown above.

Above is a linear chart of the Dow Jones Industrial Average. In both of these charts, notice prices approaching the trend line shown. It should act as resistance.

The larger structure of [2] is still up for debate, especially since the S&P 500 and Dow now differ, but some sort of ending diagonal may be forming. An expanding diagonal is possible on the S&P 500 and Dow, but this is a rare pattern that may not even exist. What final form the top ends up being should be interesting. For now, tomorrow should help us greatly in determining wave counts.

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