Tuesday, January 18, 2011

Tuesday 1/18/11 Market Update

The count has been continued since Friday's Update and works well with the action today assuming there was an ending diagonal that completed the impulse since Thursday. If there was not an ending diagonal, a "3rd of a 3rd" gap higher is possible tomorrow. The rounding of price action since Thursday and loss of momentum evident through channeling since 1/10 is evidence against a continued rally in the short term however.

There is a very good impulsive labeling to describe price action since late November. The resilience of this rally has been incredible but everything is a cycle. The the other side of the picture will be seen which will be sooner than later if the count is correct.

For reasons discussed here the past few weeks, a complete impulse since late November is likely completing a larger patter that began at least during late August.

Today may have been a historic day for stock prices if there indeed was a significant top. At the same time, the intent of this update is not to "call" a top. The purpose of this blog is to provide accurate and consistent Elliott wave observations which when used alone are usually not enough to provide consistent, low risk trading returns. If the market did indeed top today, a moment of total complacency should have been obtained, something I wrote about last year here.

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