Monday, December 7, 2009

Monday 12/7/09 Market Update

A 1 minute chart is shown above. I am feeling better about a bearish (c) of [y] of B wave (or some other B wave pattern) (the "second count") rather than a bullish wave [iii] of C when looking strictly at wave patterns today. The sell-off today was a bit sharp which is normal for second waves, but the bounce that followed seems quite weak for what should be the beginning of wave (iii) of [iii]. In fact, you can make out a double zigzag bounce pretty easily which is of course a corrective wave. Of course if there is strong buying at the open tomorrow, some other pattern is unfolding and the bullish pattern may be underway.

Yesterday I laid out some options and posted an updated intermediate term chart (which is becoming increasingly more valid). I mentioned that it seemed more likely that C was underway, but after today's action the market is suggesting a different idea.

I still do like the positioning of the peak of wave A and favor a zigzag [y] of B wave down if a continued sell-off does occur. The Dow Jones Industrial Average may be completing an expanding triangle B wave.

Considering the options and price patterns, tomorrow's action is the best indicator for the what the market will do next in the short term.

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