Monday, August 16, 2010

Monday 8/16/10 Market Update

There are some changes to the wave iv labeling above, but the count remains unchanged since yesterday's update. Prices should move higher at least into tomorrow within second wave (ii). An impulse wave higher looks to have completed today, so this works well with a rally underway.

It is possible that a zigzag wave completes wave (ii) tomorrow. If prices do not move above the channel shown above, this is not a bullish sign.

Ending diagonal wave [c] is still being retraced, but wave (ii) can still reach 50-61.8% retracement levels. Lower levels are more probable however. An initial target is the 38.2% retracement level filling the 8/12 gap.

Notice that the lower Bollinger band has already been reached. Following the current rally, prices should break below the 1000 level well into the 900s.

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