Thursday, January 14, 2010

Thursday 1/14/10 Market Update

Prices drifted higher today with the S&P 500 hitting a new primary wave [2] high. Yesterday's alternate is now the primary which is shown above. Unfortunately there is no overlap between waves [i] and [iv] with this count. Prices do fit well within a channel but there is no wedging. On a positive note, wave [iii] is shorter than wave [i] and the legs do work well as zigzags.

A chart of the Dow Jones Industrial Average is above with some Fibonacci targets and support and resistance levels. I believe the wave [v] overthrow will continue.

Dan has posted some nice charts, one of which is a chart of the short term count of the Dow Jones Industrial Average. I think the waves since the 1/12 low are clearly of zigzag nature which is to be expected. The Dow Jones Industrial Average patterns are clearer than that of the S&P 500. Neither show downward impulse waves forming though.

Both the S&P 500 and Dow Jones Industrial Average should see a small rally tomorrow. My guess is that resistance will be found around 1154 and 10760, respectively, if not sooner and [v] will complete at this top. Tomorrow may be the day this completes.

As frustrating as it has been, I feel confident that an ending diagonal is completing and a top will be seen soon. It is just a matter of time before the pattern completes.

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