Thursday, January 28, 2010

Thursday 1/28/10 Market Update

The market moved lower again but a bounce followed. This rebound was quite choppy however and stopped as soon as it reached resistance from what appears to be the wave (ii)-(iv) trend line. The chart above highlights a count that was an alternate earlier this week. More details are shown below.

If wave (v) bottomed, the decline today was a 5. An attempt to count it as such is tried above. The sharp waves at the end of the sell-off do not bode well for this count. It may very well be a zigzag i wave of an ending diagonal (v) wave. This would make sense considering the fact that the market looks like it just completed a correction and the decline today was already quite large for what would be expected for this minuette degree 5th wave.

If 1070 is breached, (v) is probably an extension. But I doubt that the lower channel line shown in the above charts will be broken at this stage of the decline. An ending diagonal is very possible here.

One final chart is above.

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