Wednesday, October 20, 2010

Wednesday 10/20/10 Market Update

It was suggested in yesterday's update that zigzag wave [ii] of C of (Z) was complete with the resumption of the bull trend expected today. This appears to have been the correct view.

Wave [iii] should be a zigzag family pattern since C is likely an ending diagonal. The wave higher today appears to have been an impulse. Because of its size in relation to wave [i], a double zigzag wave [iii] is expected. In the short term this may mean a small wave c of (w) ahead that may or may not make new highs within (Z). This is a 3rd wave however, so upside surprise is the the expectation.

As [iii] completes, prices are not expected to rise above 1212.

Any new highs above the April peak should be very limited. At that point, there will be a high probability of a new, large bear market beginning.

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