Monday, May 21, 2012

Monday 5/21/12 Market Update

There was a sharp rally today.  For proportionality reasons, the count above has been changed slightly since the last update.  The idea is still the same however; there is a second wave down following the high earlier this month which is within a larger uptrend.

A zigzag since March 2009 appears to be underway, but there is still not good balance between the legs of this pattern with c noticeably shorter than a (this is bullish).  The shorter-term waves illustrated in the first chart work well with this idea.  In the very long term, a sideways trading range since 2000 is the best estimate of action for years to come.  In other words, an all-time high ahead is not out of the question.

In the short term, the market looks strong.  There appears to have been an impulse higher today with a shallow correction following.  This is bullish as long as this is not a zigzag higher underway.

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