Monday, April 12, 2010

Monday 4/12/10 Market Update

The count has been changed slightly since Friday's update; the triangle wave b of (b) of [iv] suggested yesterday no longer appears to be valid due to the sideways consolidation seen before the final rise today. However the spirit of the primary count shown in the chart above has not changed.

More significantly however, several important alternatives have been detailed in the chart above. It is possible a wave (v) of [iii] impulse or ending diagonal is still completing. However the structure of the previous 3 days does not bode well for the impulse count in which iii of (v) would be completing; [2] of iii of (v) is quite shallow and very minimal upside targets have not yet been met. Also wave ii of (v) looks more significant than one would expect.

A wave (v) ending diagonal is also a possibility. However note that wave iii's length is challenging that of wave i that preceded it. If iii becomes longer than i, an ending diagonal guideline would be broken.

This market continues to be amazingly overbought. A 30 minute chart is above. Any moves higher are possible but should continue to be struggles. As important as it is to recognize the wave (v) of [iii] alternates, prices can come crashing down at any moment in the form of wave (c) (or (y)) of [iv]. A sideways correction is expected and a flat or triangle are most likely. Of course a wave (c) flat wave is much more damaging than a triangle (c) wave. The low ~1170s can be expected for a flat while support at the trend line shown in the 1 minute chart seems likely for a triangle.

The larger view remains unchanged with this unlikely alternate still possible.

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