Wednesday, October 6, 2010

Wednesday 10/6/10 Market Update

There is no change since yesterday's update; the view is a completing zigzag wave iii of ending diagonal wave (v). A (v) wave ending diagonal has been the primary count since the 9/24 update, the very first day of the rally.

A move above 1163 wrapping up iii should complete tomorrow. This move will probably be a minor high (perhaps stopping at the above channel line) with 1166 not being reached, however there is no rule saying iii must be shorter than wave i in an ending diagonal.

Wave (v) should complete the impulse that began 8/31. This impulse may be the beginning of a larger rally, but it has a corrective feel--the retracement level of (ii) was very small and the length of (iii) was smaller than (i). These broken guidelines seem to best with an impulse within a larger corrective pattern.

The upper Bollinger band has been reached. Given this and the waning momentum of the rally, any move above the band tomorrow should not hold for long. A small high beyond the high reached 10/5 will bring a very corrective look to the rally since 10/4.

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