Monday, June 28, 2010

Monday 6/28/10 Market Update

The count has not changed since Friday's update; a upward zigzag wave [ii] of 3 (or (ii) of [i] of 3) is likely underway. A completing (b) wave triangle has been suggested above, but the waves since Friday's low are not clear.

A pop into at least the low 1090s to retrace 38.2% of [i] should be coming when the current sideways action completes. A move to 1100-1110 is more typical however. A corrective wave since Friday's low works well with the larger count because choppy, sideways waves are not characteristic of an impulsive move higher. The first alternate count above suggests a more impulsive count, but as you can see, this is suspicious.

The waves following Friday's low look too small (in width and time) to be a complete correction. Given that typical second waves retrace 50-61.8% of the preceding first wave and that ending diagonals are usually totally retraced, it will be surprising if this level is not reached.

It is not a requirement that ending diagonals lead to a immediate reversal of price, but it is a bit unusual that this has not occurred. There are still plenty of examples of this type of action following downward ending diagonals however.

It would be nice to see the 6/24 gap filled at 1092.04, but this is not a requirement.

The larger view has not changed.

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