Wednesday, November 7, 2012

Wednesday 11/7/12 Market Update

The sharp down move today has prompted some change to the count; the alternate in the last update is now the primary.  An ending diagonal higher still underway looks like a good option with the first alternate a complete ending diagonal.

The complete ending diagonal count has a large problem given the form of the waves just after the last recovery high.  Because actionary ending diagonal legs are 3s and actionary impulse legs are 5s, the truncated top in mid-October is really only valid for the second alternate count, a strictly impulsive option; a zigzag family pattern June-October is not really visible and a low probability.

In my opinion given the sharpness and relative positioning of the move down today, this was an exhaustive move.  Momentum needs to pickup to the downside if  the last recovery high was a significant top and this does not seem likely.

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