Wednesday, May 11, 2011

Wednesday 5/11/11 Market Update

The sell-off today nearly invalidated the count shown in yesterday's update. At this time, there are a few good options; a complete (or nearly complete) wave [ii] of 3 correction or a completing wave [y] of 2 correction. If prices break well under the channel above, a larger correction that tests April's low should be in store. Perhaps in this case an impulse from 5/2-5/5 completed with a flat+zigzag double correcting the action. Because this is the best bearish count and does not count naturally, more bullish options are preferred.

The action since yesterday's high appears to be a clear impulse. The rally since the 6th best resembles a double zigzag, but an impulse or single zigzag in this position is also possible.

No matter the action this month, new recovery highs are expected this summer.

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