Wednesday, January 27, 2010

Wednesday 1/27/10 Market Update

Prices continued lower today until a few minutes after the Fed statement. At this point an impulsive rally ensued. This is likely the beginning of a wave [ii] zigzag or wave (c) of a wave [ii] flat. In any case, in my estimation wave [ii] is underway. The 1 minute chart above and 5 minute chart below show the options.

The differentiation between these two options should be clear as a zigzag is a 3 and the final leg of a flat is a 5. A gap higher will be indicative of a"3rd of a 3rd" of an impulse so a flat wave [ii] would be the most likely in this case. A gap may also be wave a of (y) on the other hand if a double zigzag is unfolding.

At the moment I am leaning towards a wave [ii] flat nearing completion. The waves are better proportioned with this count. A view of the fine labellings is below in a 1 minute chart.

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