Thursday, August 5, 2010

Thursday 8/5/10 Market Update

The short term count is largely guesswork, but a triangle b of (v) wave is suggested above in the 1 minute chart. As illustrated in yesterday's update and earlier updates, (v) should be a zigzag family wave completing within ending diagonal wave [c] of flat wave 2.

The move higher today does not look very impulsive, so a continuing correction looks like a good estimate of the action. The most simple way of labeling this is through the triangle above. The complexity of each of the legs make sense as a triangle.

If the count is correct, expect an initial move higher to perhaps the upper orange line, then a choppy pullback that need not reach the lower orange line. Impulse waves should follow for a 5 wave move to the mid to upper 1130s that completes wave 2 next week. Please keep in mind that a move higher above 1129 indicates that wave c is probably underway.

The move higher since 7/31 works well as an unfolding zigzag wave. The consolidation that has followed since the 8/1 high has been quite sideways and shallow. This is not typical for second waves.

If b of (v) is complete, the green targets above are in play.

The larger view remains unchanged.

The next update will be Sunday.

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