Tuesday, September 14, 2010

Tuesday 9/14/10 Market Update

The market continued to grind higher today as expected in yesterday's update. While there are a variety of ways to label an impulse higher since 9/7, it appears that there will be at least one more move higher testing 1130. The count above suggests two more rallies higher (wave [5] of iii and wave v) until wave (c) is complete.

The target for (c) is near strong resistance in the 1130 area. The 61.8% target above works well with the resistance area and should stop the rally.

Wave (c) appears to be contained in zigzag wave [w] of double wave 2. Wave [x] is unusual (a running flat) but the overall picture appears to be sound.

In the short term the market is very overbought, near the upper Bollinger band, and at resistance. A decline should be coming. Given the Elliott Wave picture, it is likely to be a large one even if primary wave [3] is not underway. Selling short at the current levels is a high probability, low risk trade.

As a reminder, I will be on vacation this Thursday through the following week. 9/26 or so will be the next regular update following tomorrow's final update. I may provide brief comments in the form of blog posts during my time away.

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