Tuesday, March 16, 2010

Tuesday 3/16/10 Market Update

There appear to be 5 waves up completing since the lows seen yesterday. See the chart above. The two corrections within this impulsive looking structure alternate and there are good Fibonacci relationships between its waves. The structure of its motive waves is a bit questionable however. It was difficult to come up with an impulsive count for the 3rd wave which is normally not the case for 3rd waves. In addition, the fifth wave that followed does not look like a 5 wave structure at all. It may be part of an extending 'x' wave if corrective waves higher began yesterday (see the alternate above).

The same count presented yesterday in parentheses is shown above. The subwaves of this count have been justified in the post from 3/11 here. If this count is correct, expect wave (iv) to begin very soon. It will probably be a sideways correction so it alternates with the previous wave (ii) sharp correction. A triangle, flat, or double are good options. (iv) will probably take a week or more to complete.

If the alternate above is correct, prices should collapse soon. This count seems doubtful but it is justified from a technical standpoint.

A final chart is above. The rally since 2/5 has been absolutely amazing. However if people want to continue buying, that is what will happen. An overbought market will not stop this.

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