Sunday, August 14, 2011

Friday 8/12/11 Market Update

The count remains unchanged since Thursday's update. An impulse higher since Thursday now appears to be complete. If the market corrects sideways and continues higher, the wave count will suggest an impulsive rally since Wednesday, not a zigzag, that will continue for days more. This type of action will be consistent with a second wave bounce (wave 2 of (3)) or a new multi-month rally following a significant bottom this month.

There is still good reason to believe wave (3) down is complete with a corrective bounce ensuing.

The alternate above will be the best count if there was a significant bottom this month. This possibility is a double zigzag since March 2009.

A better option is at least a 'b' wave following the 'a' wave single zigzag since March 2009.

Retracement and proportionality reasons make a second wave rally since March 2009 a poor option. Also, in the very long term view, a wave 3 down underway makes little sense.

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