Wednesday, February 16, 2011

Wednesday 2/16/11 Market Update

The market moved higher today then dropped off sharply which was not unexpected. There was a zigzag-like drop however which was followed by a near full retracement to the upside. The waves after today's high look corrective in both directions, so a correction underway looks like a good bet.

Since the market looks posed to move higher after some additional time for correction, the count has been modified. Everything after [3] of v of (iii) above has been changed.

A more bullish count to the one above would be a first wave following the wave [4] triangle with a larger "3rd of 3rd" wave coming tomorrow. Less extreme than this, and probably more likely, is an ending diagonal 5th wave forming that also began yesterday.

The view that there should be a small wave (iv) correction is once again true now. A flat or triangle wave (iv) is a good guess given the wave action and the sharp nature of (ii) (waves 2 and 4 usually alternate in form).

It looks fairly clear that the core of [v] was 2/7. All other waves around that area are overlapping. Unless there is a surprise breakout and a new gain in momentum to the upside, it should be days, not weeks, before [v] completes.

The larger view has not changed.

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