Sunday, August 8, 2010

Friday 8/6/10 Market Update

Given the sideways action earlier last week and price action Friday, the move lower Friday was likely a zigzag lower wave within a double correction. This double has been labeled as wave b of (iv) within ending diagonal wave [c] of flat wave 2. In other words, the only thing that has changed since Thursday's update are the labellings of wave b.

The soaring rally that ensued Friday appears to be wave [3] underway. If this is correct, sideways consolidation should take place for much of tomorrow in the form of wave [4] of c. If there is a larger pullback tomorrow (below ~1115), look for a gaping (3) of [3] wave higher Tuesday morning.

Given that wave c appears to be terminating soon, only the upper 1120s may be reached before a significant top completes. It would be nice to see the two gaps above filled before this occurs however.

Prices are once again just below the upper green line of ending diagonal wave [c]. 1147 is still the limit for wave (v) as marked, however there is an alternate listed above. It implies wave (iv) is a double, and this is not likely.

The larger view has not changed.

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