Tuesday, February 26, 2013

Tuesday 2/26/13 Market Update

While an enormous amount of (1) was retraced by the Monday morning burst, another impulse wave lower has unfolded, breaking through support.  In the short term this move lower since the last recovery high best resembles a zigzag due the the large retracement and the ending diagonal terminating the second impulse.

The rally following 12/31 is clearly a complete impulse or zigzag wave.  If it is a zigzag, it almost certainly terminated a larger upward pattern beginning months or years ago.  If it is an impulse, one more impulse higher could be underway to complete a zigzag.  Breaking 1550, the limit of primary count wave [5], would make all reasonable counts look much weaker.  Furthermore a zigzag underway since 12/31 would look out of proportion if only 1550 is reached.

The reason for favoring a zigzag since 12/31 is due to the waves preceding that time.  An impulse higher since [4] looks very unlikely.

Considering all action, the primary count has not changed since the last update.  The c wave ending diagonal should be retraced quickly, perhaps within 1/2-1/3 of the time it took to develop.

In the short term, any move under or near today's low will significantly increase the probability of the primary count.

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