Wednesday, May 25, 2011

Wednesday 5/25/11 Market Update

The market moved as suggested in yesterday's update. A complete ending diagonal since the last recovery high may be in.

The market usually takes the most simple path to reach its destination however. Impulse wave (a) of [v] shown above works better with the strong downside gap day earlier this week and has better proportionality between its waves than double zigzag options.

There are many counts that correctly describe the action since [iv], but the simplest suggests one final low above 1306 before a strong bounce ensues. The legs lower within the corrective structure since the last recovery high are clearly corrective looking.

The action since the last recovery high remains choppy and generally weak to the downside. The market continues to be oversold. If (2) is really a running flat with C an ending diagonal, an explosion in price should begin soon.

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