Tuesday, March 30, 2010

Tuesday 3/30/10 Market Update

With the exception of some slight modifications to yesterday's wave labellings, the count remains unchanged since yesterday's post. The same alternatives remain in play.

The above chart suggests completed c and d waves within triangle wave (iv). This means wave e of (iv) is underway. If this is a correct assessment, expect (iv) to complete tomorrow within wave (iii) territory (a rule). Corrective waves have been unfolding so there is a degree of unpredictability to the count. However because there have been no impulse waves down, the path of least resistance still appears to be up.

The above chart shows the rally since 2/5 in 30 minute bars. In bull markets, 4th waves normally reach or surpass the lower channel line extended from the second wave, but connecting 1st and 3rd waves. This appears not to be the case if the count is correct however. On the other hand, consider the base channel. For the case of wave [iii], the base channel and channel just discussed are virtually equivalent. The base channel's lower line is normally not broken by a 4th wave. In the case of the above wave [iii], wave (iii) never broke out of the base channel and its lower line will not be reached if the count is accurate. What is more, a triangle wave (iv) is already longer in duration than the wave (ii) that came before it. This is typical for triangle waves. So the longevity of the correction seems reasonable and works well with the count detailed above.

A wave (v) breakout following wave (iv) may be short lived, but should take prices at least into the upper 1080s. Targets will be discussed after the completion of the correction.

The larger view remains unchanged.

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