Thursday, April 8, 2010

Thursday 4/8/10 Market Update

The count suggested yesterday has been changed somewhat; see the 1 minute chart above. A double zigzag lower since the Tuesday 4/6 peak looks most likely. Because this sell-off looks too small to be wave [iv] alone, this wave is probably wave (a) of a wave [iv] triangle or flat correction. A wave [iv] double is also possible. In this case, the sell-off should be marked as a single zigzag (w) wave.

A large impulse higher since today's low appears to be nearing completion. A final 5th wave of this rally may be completing tomorrow morning. This impulse should be wave a of (b) if the flat or triangle idea is correct, otherwise wave a of (x) if a double is unfolding. An alternative wave [1] of iii of (v) is also possible (extended wave (v)), however this looks unlikely. No matter the count, it looks like another recovery high will be made following a b wave correction.

An intermediate view of the market remains the same. Note that the sell-off beginning 4/6 this week illustrated in the first chart is difficult to view as an impulse wave. The rally that followed today retracing more than 78.6% of the decline supports this view. As a result, a completing wave [iv] makes sense; some of the alternatives suggested above require a much larger correction to unfold that the one seen since 4/6. Furthermore, it is difficult to push the labellings in the above 30 minute chart to later dates when trying to justify a wave (iv) of [iii] correction for instance.

The larger view remains unchanged.

The next post will be Sunday evening.

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