Thursday, June 10, 2010

Thursday 6/10/10 Market Update

The count has been updated since yesterday's post. A new wave (ii) of [iii] count is suggested above.

A double zigzag in this position makes sense from a wave perspective. Today's initial large, sharp rise was from a low level set yesterday. A new high was then barely reached in the morning hours. This action is a corrective looking rise in a larger bear market. Following this point, a shallow correction followed that set the stage for another leg higher. This leg was clearly smaller and weaker than the initial morning rally which is another sign of a correction. Unless a larger "3rd of a 3rd" wave higher can follow today's action, a correction higher remains the best count. Breaking below 1072 is bearish.

More than 61.8% of (i) has been retraced, however the waves since Tuesday seem best suited as waves within (i) of [iii], not [ii]. The reason is that [ii] is already quite wide and a set of zigzags higher from Tuesday's lows do not work well in a larger count.

Because of the size and large retracement of (i), 1090 should not be broken by (ii). A move above this level will essentially invalidate the count. If the count is correct, tomorrow will certainly close lower. A gap down is a possibility.

The larger view has not changed. Note that the middle Bollinger Band has nearly been met.

blog comments powered by Disqus