Wednesday, November 3, 2010

Wednesday 11/3/10 Market Update

As suggested yesterday, upside was limited today as wave b of (y) should now be complete. The market looks poised to move higher tomorrow following extended wave [1] but this should be limited to a small waves [3] and [5] of c of (y) completing under 1208. With a rally, the Dow will have a chance to make a respectable new high to complete its ending diagonal pattern.

The entire move since 8/31 should complete tomorrow with a breach of the lower [ii]-[iv] line (blue line) imminent. It is possible that wave c of (y) of [v] drags into tomorrow, but this looks unlikely.

Given the numerous zigzag waves higher that began last month, an ending diagonal count as described works very well. Unless [v] is a rare triple zigzag, a major top tomorrow is likely.

Following the completion the rally since late August, the entire move higher since March 2009 should also complete. Look for a quick snap lower to 1150 or so before a much larger down move begins.

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