Tuesday, May 17, 2011

Tuesday 5/17/11 Market Update

The market sold off in the morning, then rebounded in a choppy fashion. It was suggested in yesterday's update that an ending diagonal may be unfolding since Thursday. The view is still downward in the short term, but now an impulse appears to be underway since Thursday.

There is no change to the count in the 30 minute chart above. The pattern since the last recovery high is now very wide. If prices fail to hold the 61.8% retracement level above, the next best view is a double zigzag underway since the last recovery high with a single zigzag nearly complete as illustrated above.

It is very difficult to imagine a significant top in place given what should at least be a zigzag since March to new highs. This makes sense given the way the market is acting since the last recovery high. Prices need to start breaking away soon to create a more downward impulsive environment. At this time however, the market is technically oversold with a straightforward zigzag the most natural count since the last recovery high.

It is possible to label a complete impulse since July, but the lack of proportionality between its waves makes it unnatural and odd.

blog comments powered by Disqus