The alternate and primary counts suggested in yesterday's update have been reversed. The chart above is showing a completing wave (iv) with c underway.
The reason for the change is due to the action seen today. First, the move lower since Friday's peak is difficult to view as an impulse given the overlapping waves and lack of symmetry. Second, it looks like there will be another move higher beyond today's highs. The width and complexity of what appears to be an unfolding upward zigzag family wave works far better as the 'c' wave of a triangle than as a second wave. Complexity is typical for triangle 'c' waves.
There is resistance in the mid to upper 1050s. This is also near the 61.8% retracement of b and the upper line of what seems to be the wave c of the channel above (a zigzag usually fits into a channel as drawn). Also notice the larger channel shown in the 1st chart approaching.
If prices do stop in the mid to upper 1050s tomorrow, a bearish descending triangle will probably be the best view for (iv). This means wave d should reach or come close to reaching the yellow line above. It is not of major concern what type of triangle (iv) may be, but a descending triangle is a sign of weakness in a bear market. There has been a feeling of heaviness in the market (take the large retracement of today's advance as an example) and prices are following a large ending diagonal, so a descending triangle works well in the current conditions. A second wave retracement beyond 61.8% (if prices reach that high tomorrow) on the other hand does not work well with the theme.
With the primary count change, look for the 1010 area to stop the decline since early August before a second wave bounce ensues.
blog comments powered by Disqus