Tuesday, February 2, 2010

Tuesday 2/2/10 Market Update

The rally continued today within what appears to be wave (w) of double zigzag wave [ii]. The first zigzag, wave (w), should be nearing completion. The chart above details today's action with a larger view below.

Prices are barely hanging onto the trend line shown in the first chart. In addition, c appears to be nearing completion in a short term overbought market. This trend line will be broken sometime tomorrow.

When this line is broken, a consolidation should be expected through the completion of wave (x) of [ii]. The reason is that [ii] does not seem large enough in width or distance. Only 38.2% of [i] has been retraced which is a small amount for second waves. If c continues beyond 50%, then it becomes more probable that a top has been reached. Whatever happens, remember there is no rule saying wave [ii] needs to retrace most of [i], it is just a pattern and probability.

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