Wednesday, January 6, 2010

Wednesday 1/6/10 Market Update

Prices drifted higher today through what appears to have been a series of zigzags. This suspicious rally may be the 'b' wave of a flat. The wave count is very much up for debate, but I anticipate the need for a solid foundation before another substantial impulse wave higher is seen. Perhaps ~1030 will be that level.

The 1 minute chart above shows a few possible counts. More price information will help us determine an accurate count. For now, I think a completing ending diagonal count is a reasonable guess. If the charts are correct or close to correct, the market is completing wave (b) of [ii] of ending diagonal C of (Z) of [2]. Prices should move lower tomorrow if c of (b) is completing, but if that does not take place, higher prices will probably be in the form of more zigzag waves. Any major new high (by more than a few points) will cause us to question the larger count.

The 10 minute chart above is a view of one ending diagonal scenario. The gap higher 1/4/10 had considerable breadth, so it makes sense for it to be part of [iii], particularity wave (a) of [iii]. Note also the new B and [i] wave labellings. This relabeling causes no problems.

A 5 minute chart of the Dow Jones Industrial Average is above. It has not confirmed any of the highs seem on the S&P 500 the previous 2 days. It seems likely that lower prices on this index without a new high will be in the form of corrective waves.

Finally above is a daily chart of the S&P 500. It is a 1 year linear bar chart. The B wave has been along with the targets.

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