Sunday, February 21, 2010

Friday 2/19/10 Market Update

If wave [ii] did not complete Friday, it is very close to doing so. A possible count is in the 1 minute chart above. The waves following Friday's top look corrective but it is getting difficult to extend the labellings to allow more 4th waves within (c) of [ii]. Notice the overlap following this pullback.

The market continues to be overbought while showing poor advancing volume.

The above chart shows considerable negative divergence. These indicators work well with the Elliott wave count; both are suggesting at least a pullback is ahead.

If the market moves higher Monday, it should be within wave v. The gap near 1115 may be filled. A move lower should be viewed as a possible wave iv pullback. Looking at the 15 minute chart above, iv looks small compared to wave ii so this is not out of the question. A 61.8% retracement has already been reached however (with a higher level on other indices), so upside should be limited.

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