Tuesday, November 24, 2009

Tuesday 11/24/09 Market Update

The S&P 500 and Dow Jones Industrial Average closed slightly lower today. It turns out wave iv completed yesterday but wave v had not yet completed. That happened early today and set the stage for a corrective bounce.

Note the wave crossing near the close today. The upward waves also look like zigzags with the first sharper than the second. These are all signs of a corrective bounce, not a new rally. Prices need to move below the 1101 and 1098 areas to confirm this of course but a wave (ii) double zigzag appears to have completed.

I do not expect a gap down tomorrow, but if wave (iii) has arrived, expect lower prices tomorrow with (iii) eventually reaching at least 1090. If there really was a truncated wave [v] top, weakness should be expected.

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