Tuesday, June 22, 2010

Tuesday 6/22/10 Market Update

The labellings over the past few weeks have been changed since yesterday's update, however the larger view that a decline within intermediate wave (1) is underway has not changed. The above chart suggests that flat wave 2 completed within impulse wave (1) lower. A break below the 1090 area should confirm that wave 3 is underway.

An impulse wave higher is my interpretation of the rally since 6/8, however an alternate is suggested below. If the alternate is true, the April top is used as the primary wave [2] completion. Slightly more than 50% of the entire decline since April has been retraced. This retracement level and the retracement of 1 as suggested here are both valid levels for a complete second wave correction.

A closer view of the recent slide revels two impulsive interpretations which are suggested above. Either are possible at this point.

Please keep in mind that the Fed statement is 2:15 EST tomorrow. This should initiate a volatile trading time that should give clues to the direction of the market in the short term. Again, 1090 needs to hold for upside potential to be preserved.

Although wide, wave 2 looks quite normal; prices have moved lower after reaching the 61.8% retracment level.

The larger view has not changed. Notice that prices reversed after reaching the upper Bollinger band.

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