Monday, April 26, 2010

Monday 4/26/10 Market Update

The ending diagonal wave [v] of A alternate suggested last week is now the primary count. The reason is due to the corrective waves seen since today's new recovery high. If this is a correct assessment of the sell-off, the ending diagonal suggested above or triangle wave [iv] of A alternate are basically the only options. These are detailed in the above chart with less desirable alternates at the bottom of the chart. Because the suggested correction looks like it will be relatively shallow, wave (iv) of [v] of an ending diagonal makes more sense than wave (ii) of impulse wave [v] following the wave [iv] triangle for instance (however an undesirable impulsive count suggesting the "3rd of a 3rd" of [v] is ahead is also an option). Obviously if a stronger sell-off than expected ensues, the view will be reversed in favor of the triangle count if not changed entirely. However the good breadth of the labeled wave a of (iii) supports the original thesis.

A more detailed view can be seen in the chart above. It seems reasonable to believe that downward corrective zigzag waves are unfolding (there are shallow, wide upward corrections to the sell-off), but is it possible that a larger impulse lower is underway. However assuming that the count is correct, note that it is possible that wave (iv) is actually an unfolding sideways correction, but this would be unusual for an ending diagonal.

The larger view remains unchanged.

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